<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 15, 1997
SECURITIES ACT FILE NO. 333-
INVESTMENT COMPANY ACT FILE NO. 811-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM N-2
[X] REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[_] PRE-EFFECTIVE AMENDMENT NO.
[_] POST-EFFECTIVE AMENDMENT NO.
AND/OR
[X] REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[_] AMENDMENT NO.
(CHECK APPROPRIATE BOX OR BOXES)
---------------
SNYDER STRYPES TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
---------------
C/O PUGLISI & ASSOCIATES
850 LIBRARY AVENUE
SUITE 204
NEWARK, DELAWARE 19715
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (302) 738-6680
DONALD J. PUGLISI
PUGLISI & ASSOCIATES
850 LIBRARY AVENUE
SUITE 204
NEWARK, DELAWARE 19715
(NAME AND ADDRESS OF AGENT FOR SERVICE)
---------------
COPIES TO:
NORMAN D. SLONAKER, THOMAS H. MCCORMICK, ESQ. MICHAEL W. BLAIR,
ESQ. SHAW, PITTMAN, POTTS & ESQ.
BROWN & WOOD LLP THROWBRIDGE DEBEVOISE & PLIMPTON
ONE WORLD TRADE CENTER 2300 N STREET, N.W. 875 THIRD AVENUE
NEW YORK, NEW YORK WASHINGTON, D.C. 20037 NEW YORK, NEW YORK
10048-0557 10022
---------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
the effective date of this Registration Statement.
If any securities being registered on this form will be offered on a delayed
or continuous basis in reliance on Rule 415 under the Securities Act of 1933,
as amended, other than securities offered in connection with a dividend
reinvestment plan, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
---------------
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
================================================================================
<TABLE>
<CAPTION>
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES BEING OFFERING PRICE AGGREGATE AMOUNT OF
BEING REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
STRYPES representing
shares of beneficial
interest............. 4,600,000 Shares $27.50 $126,500,000 $38,333
</TABLE>
================================================================================
(1) Includes an aggregate of 600,000 STRYPES that (i) may be issued in
connection with the exercise of an over-allotment option and (ii) were
subscribed for and purchased by an affiliate of Merrill Lynch, Pierce,
Fenner & Smith Incorporated in connection with the formation of Snyder
STRYPES Trust.
(2) Estimated pursuant to Rule 457(c) promulgated under the Securities Act of
1933, as amended.
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>
CROSS-REFERENCE SHEET*
<TABLE>
<CAPTION>
ITEM NUMBER IN FORM N-2 CAPTION IN PROSPECTUS
----------------------- ---------------------
PART A--INFORMATION REQUIRED IN A PROSPECTUS
<C> <S> <C>
1. Outside Front Cover............................. Front Cover Page
2. Inside Front and Outside Back Cover Page........ Front Cover Page; Inside Front Cover Page; Underwriting
3. Fee Table and Synopsis.......................... Prospectus Summary; Fee Table
4. Financial Highlights............................ Not Applicable
5. Plan of Distribution............................ Front Cover Page; Prospectus Summary; Net Asset
Value; Underwriting
6. Selling Shareholders............................ Not Applicable
7. Use of Proceeds................................. Use of Proceeds; Investment Objective and Policies
8. General Description of the Registrant........... Front Cover Page; Prospectus Summary; The Trust; Investment Objective and
Policies; Investment Restrictions; Risk Factors; Dividends and
Distributions; Additional Information
9. Management...................................... Trustees; Management Arrangements
10. Capital Stock, Long-Term Debt and Other
Securities.................................... Description of STRYPES
11. Defaults and Arrears on Senior Securities....... Not Applicable
12. Legal Proceedings............................... Not Applicable
13. Table of Contents of the Statement of
Additional Information........................ Not Applicable
<CAPTION>
PART B--INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
<S> <C> <C>
14. Cover Page...................................... Not Applicable
15. Table of Contents............................... Not Applicable
16. General Information and History................. Not Applicable
17. Investment Objective and Policies............... Prospectus Summary; Investment Objective and Policies;
Investment Restrictions
18. Management...................................... Trustees; Management Arrangements
19. Control Persons and Principal Holders of
Securities.................................... Management Arrangements; Underwriting; Legal Matters;
Experts
20. Investment Advisory and Other Services.......... Management Arrangements
21. Brokerage Allocation and Other Practices........ Investment Objective and Policies
22. Tax Status...................................... Certain United States Federal Income Tax Considerations
23. Financial Statements............................ Experts; Independent Auditors' Report; Statement of
Assets, Liabilities and Capital
</TABLE>
- --------
* PURSUANT TO THE GENERAL INSTRUCTIONS TO FORM N-2, ALL INFORMATION REQUIRED
TO BE SET FORTH IN PART B: STATEMENT OF ADDITIONAL INFORMATION HAS BEEN
INCLUDED IN PART A: THE PROSPECTUS.
PART C--OTHER INFORMATION
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
<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
PRELIMINARY PROSPECTUS DATED AUGUST 15, 1997
PROSPECTUS
4,000,000 STRYPESSM
SNYDER STRYPES TRUST
(EXCHANGEABLE FOR SHARES OF COMMON STOCK OF SNYDER COMMUNICATIONS, INC.)
----------
Each of the Structured Yield Product Exchangeable for StockSM (the "STRYPES")
of Snyder STRYPES Trust (the "Trust") offered hereby represents a proportionate
share of beneficial interest in the Trust, which entitles the holder to receive
an annual distribution of $ , and will be exchanged for between shares
and one share of Common Stock, par value $.001 per share (the "Snyder Common
Stock"), of Snyder Communications, Inc. (the "Company") (or, in certain
circumstances, cash, or a combination of cash and Snyder Common Stock, with an
equal value) per STRYPES upon conclusion of the term of the Trust on ,
2000 (the "Exchange Date"). The annual distribution of $ per STRYPES is
payable quarterly on each , , and , commencing , 1997. The
STRYPES are not subject to redemption.
The Trust is a newly created Delaware business trust established to purchase
and hold (i) a series of zero-coupon U.S. Government securities ("U.S. Treasury
Securities") maturing on a quarterly basis through the Exchange Date and (ii) a
forward purchase contract (the "Contract") with an existing stockholder (the
"Contracting Stockholder") of the Company relating to shares of Snyder Common
Stock. The Trust's investment objective is to distribute to holders of STRYPES
on a quarterly basis $ per STRYPES and, on the Exchange Date, a number of
shares of Snyder Common Stock (or, under certain circumstances, cash, or a
combination of cash and Snyder Common Stock, with an equal value) per STRYPES
determined in accordance with the following formula (the "Exchange Rate
Formula"), subject to certain adjustments: (a) if the Exchange Price is greater
than or equal to $ per share of Snyder Common Stock (the "Threshold
Appreciation Price"), shares of Snyder Common Stock per STRYPES, (b) if the
Exchange Price is less than the Threshold Appreciation Price but is greater
than the Initial Price, a fractional share of Snyder Common Stock per STRYPES
so that the value thereof (determined based on the Exchange Price) equals the
Initial Price and (c) if the Exchange Price is less than or equal to the
Initial Price, one share of Snyder Common Stock per STRYPES. The "Exchange
Price" means the average Closing Price (as defined herein) per share of Snyder
Common Stock on the 20 Trading Days (as defined herein) immediately prior to,
but not including, the second Trading Day preceding the Exchange Date. The
"Initial Price" is $ , the last reported sale price of the Snyder Common Stock
on the New York Stock Exchange on , 1997. Holders otherwise entitled to
receive fractional shares of Snyder Common Stock in respect of their aggregate
holdings of STRYPES will receive cash in lieu thereof. Pursuant to the terms of
the Contract, the Contracting Stockholder is obligated to deliver to the Trust
on the Business Day immediately preceding the Exchange Date a number of shares
of Snyder Common Stock equal to the number required by the Trust in order to
exchange all of the STRYPES on the Exchange Date in accordance with the Trust's
investment objective. The obligation of the Contracting Stockholder to deliver
shares of Snyder Common Stock under the Contract may be cash settled, at the
option of the Contracting Stockholder, in whole or in part, by delivering to
the Trust on the Business Day immediately preceding the Exchange Date, in lieu
of the shares of Snyder Common Stock otherwise deliverable in respect of which
an election to exercise the cash settlement option is made, cash in an amount
equal to the value of such shares at the Exchange Price. In the event that the
Contracting Stockholder elects to satisfy its obligation under the Contract in
whole or in part by delivering cash, holders of the STRYPES will receive cash,
or a combination of cash and Snyder Common Stock, on the Exchange Date. AS
DESCRIBED HEREIN, THE EXCHANGE PRICE WILL REPRESENT A DETERMINATION OF THE
VALUE OF A SHARE OF SNYDER COMMON STOCK IMMEDIATELY PRIOR TO THE EXCHANGE DATE.
ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THE AMOUNT RECEIVABLE BY HOLDERS OF
THE STRYPES ON THE EXCHANGE DATE WILL BE EQUAL TO OR GREATER THAN THE ISSUE
PRICE OF THE STRYPES. IF THE EXCHANGE PRICE OF THE SNYDER COMMON STOCK IS LESS
THAN THE INITIAL PRICE, SUCH AMOUNT RECEIVABLE ON THE EXCHANGE DATE WILL BE
LESS THAN THE ISSUE PRICE PAID FOR THE STRYPES, IN WHICH CASE AN INVESTMENT IN
STRYPES WILL RESULT IN A LOSS. SEE "INVESTMENT OBJECTIVES AND POLICIES--
GENERAL" AND "--THE CONTRACT."
(continued on following page)
SEE "RISK FACTORS," BEGINNING ON PAGE 21 OF THIS PROSPECTUS, FOR CERTAIN
CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE STRYPES.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO SALES PROCEEDS TO
PUBLIC LOAD(1) TRUST(2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per STRYPES....................................... $ $ $
- --------------------------------------------------------------------------------
Total(3).......................................... $ $ $
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) The Company and the Contracting Stockholder have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(2) Expenses of the offering, which are payable by the Contracting Stockholder,
are estimated to be approximately $ .
(3) The Trust has granted the Underwriters an option, exercisable for 30 days
from the date hereof, to purchase up to an additional 600,000 STRYPES
(subject to decrease as a result of the issuance and sale of STRYPES in
connection with the formation of the Trust) to cover over-allotments, if
any. If all such STRYPES are purchased, the total Price to Public, Sales
Load and Proceeds to Trust will be $ , $ and $ , respectively. See
"Underwriting."
----------
The STRYPES are offered by the several Underwriters, subject to prior sale,
when, as and if issued to and accepted by them, and subject to approval of
certain legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the STRYPES will be made through the facilities of The Depository
Trust Company on or about , 1997.
- -----
SMService mark of Merrill Lynch & Co., Inc.
----------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
MONTGOMERY SECURITIES
BEAR, STEARNS & CO. INC.
----------
The date of this Prospectus is , 1997.
<PAGE>
(continued from previous page)
The Contract provides that, from and after a Tax Event Date (as defined
herein), the Contracting Stockholder's obligations thereunder may be
accelerated, at the option of the Contracting Stockholder, in whole but not in
part, at the Tax Event Acceleration Price (as defined herein). In such event,
the U.S. Treasury Securities will be sold by the Trust, and the proceeds
therefrom will be distributed along with the Tax Event Acceleration Price
received under the Contract after providing for any expenses of the Trust. See
"Investment Objective and Policies--The Contract--Acceleration Upon Tax
Event."
In the event of certain consolidations or mergers of the Company or any
successor thereto into another entity, or the liquidation of the Company or
any such successor, or certain related events, in the event that the
Contracting Stockholder exercises its option to accelerate the Contract upon
the occurrence of a Tax Event or upon the occurrence of certain defaults by
the Contracting Stockholder under the Contract or the collateral arrangements
described herein, the Contract would be accelerated, the Trust's assets (other
than assets received pursuant to the Contract) would be liquidated, the net
assets of the Trust would be distributed pro rata to the holders of the
STRYPES and the term of the Trust would expire. See "Investment Objective and
Policies--The Contract--Reorganization Events Causing a Termination of the
Trust," "--Acceleration Upon Tax Event" and "--Collateral Arrangements;
Acceleration."
Reference is made to the accompanying prospectus of the Company with respect
to the shares of Snyder Common Stock which may be received by a holder of
STRYPES on the Exchange Date or upon earlier dissolution of the Trust. The
Company is not affiliated with the Trust, will not receive any of the proceeds
from the sale of the STRYPES and will have no obligations with respect to the
STRYPES.
Application will be made to list the STRYPES on the New York Stock Exchange
(the "NYSE"). Prior to the offering there has been no public market for the
STRYPES. Shares of closed-end investment companies have in the past frequently
traded at a discount from their net asset values and initial public offering
prices. The risks associated with this characteristic of closed-end investment
companies may be greater for investors expecting to sell shares of a closed-
end investment company soon after the completion of an initial public
offering.
The STRYPES are designed to provide investors with a current distribution
yield (the Company has not paid any dividends on the Snyder Common Stock since
its initial public offering), while also providing the opportunity for
investors to share in the appreciation, if any, of the value of the Snyder
Common Stock above the Threshold Appreciation Price. However, the opportunity
for equity appreciation afforded by an investment in the STRYPES is less than
that afforded by a direct investment in the Snyder Common Stock because the
value of the Snyder Common Stock receivable by a holder of a STRYPES upon
exchange on the Exchange Date will exceed the issue price of such STRYPES only
if the Exchange Price exceeds the Threshold Appreciation Price, which
represents an appreciation of % over the Initial Price. In addition, because
each STRYPES will entitle the holder to receive only shares of Snyder
Common Stock if the Exchange Price exceeds the Threshold Appreciation Price,
holders of the STRYPES will be entitled to receive upon exchange only % of
any appreciation of the value of the Snyder Common Stock above the Threshold
Appreciation Price. Holders of STRYPES will realize the entire decline in
value if the Exchange Price is less than the Initial Price. There can be no
assurance that the distribution yield on the STRYPES will be higher than the
dividend yield on the Snyder Common Stock over the term of the Trust.
The STRYPES may be a suitable investment for investors who are able to
understand the unique nature of the Trust and the economic characteristics of
the Contract and the U.S. Treasury Securities held by the Trust.
The Trust has adopted a fundamental policy that the Contract may not be
disposed of during the term of the Trust and that, except under limited
circumstances, the U.S. Treasury Securities may not be disposed of prior to
their respective maturities. As a result, the Trust will continue to hold the
Contract despite any significant decline in the market price of the Snyder
Common Stock or adverse changes in the financial condition of the Company. The
Trust will not be managed like a typical closed-end investment company. The
Trust will be treated as a grantor trust for United States Federal income tax
purposes and each holder of STRYPES will be treated as the owner of its pro
rata portion of the Contract and the U.S. Treasury Securities. The U.S.
Treasury Securities held by the Trust will be treated for United States
Federal income tax purposes as having original issue discount and holders of
STRYPES will be required to recognize currently as income their pro rata
portion of such original issue discount as it accrues over the term of the
Trust. The quarterly cash distributions paid to the holders of STRYPES, which
distributions are anticipated to exceed the currently includable original
issue discount, will be treated as a tax-free return of the holders' costs of
the U.S. Treasury Securities and any previously included original issue
discount, and therefore will not be considered current income to holders upon
receipt thereof for United States Federal income tax purposes. Although under
current law holders of STRYPES should not recognize income, gain or loss with
respect to the Contract over its term, holders will recognize taxable gain or
loss upon receipt of cash, if any, upon dissolution of the Trust. For a
discussion of certain United States Federal income tax considerations for
holders of the STRYPES, see "Certain United States Federal Income Tax
Considerations."
This Prospectus sets forth concisely information about the Trust that a
prospective investor ought to know before investing and should be read and
retained for future reference.
---------------
Certain persons participating in this offering may engage in transactions
that stabilize, maintain or otherwise affect the price of the STRYPES or the
Snyder Common Stock. Such transactions may include stabilizing, the purchase
of STRYPES to cover syndicate short positions and the imposition of penalty
bids. For a description of these activities, see "Underwriting."
2
<PAGE>
PROSPECTUS SUMMARY
The following summary should be read in conjunction with the more detailed
information appearing elsewhere in this Prospectus. Unless otherwise indicated,
the information contained in this Prospectus assumes that the Underwriters'
over-allotment option is not exercised.
THE TRUST
Snyder STRYPES Trust (the "Trust") is a newly created Delaware business trust
that will be registered as a non-diversified closed-end management investment
company under the Investment Company Act of 1940, as amended (the "Investment
Company Act"). The term of the Trust will expire on or shortly after ,
2000 (the "Exchange Date"), except that the Trust may be dissolved prior to
such date under certain limited circumstances. The Trust will be treated as a
grantor trust for United States Federal income tax purposes.
THE OFFERING
The Trust is offering 4,000,000 STRYPES, each representing a proportionate
share of beneficial interest in the Trust, at an initial public offering price
of $ per STRYPES (which is equal to the last reported sale price of the
Snyder Common Stock on the NYSE on , 1997, the date of the offering (the
"Offering")). The Underwriters have been granted an option, exercisable for 30
days from the date of this Prospectus, to purchase up to an aggregate of
600,000 additional STRYPES (subject to decrease as a result of the issuance and
sale of STRYPES in connection with the formation of the Trust) to cover over-
allotments, if any. See "Underwriting."
THE COMPANY
The Company is a rapidly growing international provider of complete marketing
solutions primarily to Fortune 500 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 geographic presence, the Company
seeks to provide a single source for its clients' outsourced sales and
marketing needs.
Reference is made to the accompanying prospectus of the Company with respect
to the shares of Snyder Common Stock which may be received by a holder of
STRYPES on the Exchange Date or upon earlier dissolution of the Trust. The
Company is not affiliated with the Trust, will not receive any of the proceeds
from the sale of the STRYPES and will have no obligations with respect to the
STRYPES. THE PROSPECTUS OF THE COMPANY IS BEING ATTACHED HERETO AND DELIVERED
TO PROSPECTIVE PURCHASERS OF STRYPES TOGETHER WITH THIS PROSPECTUS FOR
CONVENIENCE OF REFERENCE ONLY. THE PROSPECTUS OF THE COMPANY DOES NOT
CONSTITUTE A PART OF THIS PROSPECTUS, NOR IS IT INCORPORATED BY REFERENCE
HEREIN.
INVESTMENT OBJECTIVE AND POLICIES
The Trust will purchase and hold a series of zero-coupon U.S. Government
securities ("U.S. Treasury Securities") maturing on a quarterly basis through
the Exchange Date and a forward purchase contract (the "Contract") with an
existing stockholder (the "Contracting Stockholder") of the Company relating to
shares of
3
<PAGE>
Snyder Common Stock. The Trust's investment objective is to distribute to
holders of the STRYPES ("Holders") on a quarterly basis $ per STRYPES (which
amount equals the pro rata portion of the fixed quarterly distributions from
the proceeds of the maturing U.S. Treasury Securities held by the Trust) and,
on the Exchange Date, a number of shares (such number of shares being
hereinafter referred to as the "Exchange Amount") of Snyder Common Stock (or,
in certain circumstances, cash, or a combination of cash and Snyder Common
Stock, with an equal value) per STRYPES determined in accordance with the
following formula (the "Exchange Rate Formula"), subject to certain
adjustments: (a) if the Exchange Price is greater than or equal to $ per
share of Snyder Common Stock (the "Threshold Appreciation Price"), shares
of Snyder Common Stock per STRYPES, (b) if the Exchange Price is less than the
Threshold Appreciation Price but is greater than $ (the "Initial Price"), a
fractional share of Snyder Common Stock per STRYPES so that the value thereof
(determined based on the Exchange Price) equals the Initial Price and (c) if
the Exchange Price is less than or equal to the Initial Price, one share of
Snyder Common Stock per STRYPES. The "Exchange Price" means the average Closing
Price (as defined herein) per share of Snyder Common Stock on the 20 Trading
Days (as defined herein) immediately prior to, but not including, the second
Trading Day preceding the Exchange Date. Holders otherwise entitled to receive
fractional shares in respect of their aggregate holdings of STRYPES will
receive cash in lieu thereof. See "Investment Objective and Policies--General"
and "--Fractional Interests."
Pursuant to the terms of the Contract, the Contracting Stockholder is
obligated to deliver to the Trust on the Business Day immediately preceding the
Exchange Date a number of shares of Snyder Common Stock equal to the number
required by the Trust in order to exchange all of the STRYPES (including any
STRYPES issued pursuant to the over-allotment option granted by the Trust to
the Underwriters and STRYPES issued in connection with the formation of the
Trust) on the Exchange Date in accordance with the Trust's investment
objective. The obligation of the Contracting Stockholder to deliver shares of
Snyder Common Stock under the Contract may be cash settled, at the option of
the Contracting Stockholder, in whole or in part, by delivering to the Trust on
the Business Day (as defined herein) immediately preceding the Exchange Date,
in lieu of the shares of Snyder Common Stock otherwise deliverable in respect
of which an election to exercise the cash settlement option is made, cash in an
amount equal to the value of such shares at the Exchange Price. In the event
that the Contracting Stockholder elects to satisfy its obligation under the
Contract in whole or in part by delivering cash, holders of the STRYPES will
receive cash, or a combination of cash and Snyder Common Stock, on the Exchange
Date. See "Investment Objective and Policies--The Contract."
Holders of the STRYPES will receive distributions at the rate per STRYPES of
$ per annum, or $ per quarter, payable quarterly on each , , and
(or, if any such date is not a Business Day, on the next succeeding
Business Day), to Holders of record as of each , , and ,
respectively. The first distribution (in respect of the period from ,
1997 until , 1997) will be payable on , 1997 to Holders of record as
of , 1997, and will equal $ per STRYPES. See "Investment Objective and
Policies--Trust Assets."
On the Exchange Date, each outstanding STRYPES will be exchanged for between
shares and one share of Snyder Common Stock (or, pursuant to the right of
the Contracting Stockholder, cash, or a combination of cash and Snyder Common
Stock, with an equal value), depending on the Exchange Price. AS DESCRIBED
HEREIN, THE EXCHANGE PRICE WILL REPRESENT A DETERMINATION OF THE VALUE OF A
SHARE OF SNYDER COMMON STOCK IMMEDIATELY PRIOR TO THE EXCHANGE DATE.
ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THE AMOUNT RECEIVABLE BY HOLDERS OF
THE STRYPES ON THE EXCHANGE DATE WILL BE EQUAL TO OR GREATER THAN THE ISSUE
PRICE OF THE STRYPES. IF THE EXCHANGE PRICE OF THE SNYDER COMMON STOCK IS LESS
THAN THE INITIAL PRICE, SUCH AMOUNT RECEIVABLE ON THE EXCHANGE DATE WILL BE
LESS THAN THE ISSUE PRICE PAID FOR THE STRYPES, IN WHICH CASE AN INVESTMENT IN
STRYPES WILL RESULT IN A LOSS. The number of shares of Snyder Common Stock
distributable to Holders on the Exchange Date, as determined pursuant to the
Exchange Rate Formula, will be subject to adjustment in the event of certain
dividends or distributions, subdivisions, splits, combinations, issuances of
certain rights or warrants or distributions of certain assets with respect to
the Snyder Common Stock.
4
<PAGE>
In the event of certain consolidations or mergers of the Company or any
successor thereto into another entity, or the liquidation of the Company or any
such successor, or certain related events, in the event that the Contracting
Stockholder exercises its option to accelerate the Contract upon the occurrence
of a Tax Event or upon the occurrence of certain defaults by the Contracting
Stockholder under the Contract or the collateral arrangements described herein,
the Contract would be accelerated, the Trust's assets (other than assets
received pursuant to the Contract) would be liquidated, the net assets of the
Trust would be distributed pro rata to the Holders of the STRYPES and the term
of the Trust would expire. See "Investment Objective and Policies--The
Contract--Dilution Adjustments," "--Reorganization Events Causing a Termination
of the Trust," "--Acceleration Upon Tax Event" and "--Collateral Arrangements;
Acceleration."
TRUST ASSETS
The Trust's assets will consist of: (i) a series of zero-coupon U.S. Treasury
Securities with face amounts and maturities corresponding to the amounts and
payment dates of the distributions payable with respect to the STRYPES,
comprising approximately % of the initial assets of the Trust, and (ii) the
Contract with the Contracting Stockholder relating to shares of Snyder Common
Stock, comprising approximately % of the initial assets of the Trust.
Pursuant to the terms of the Contract, the Contracting Stockholder is
obligated to deliver to the Trust on the Business Day immediately preceding the
Exchange Date an aggregate number of shares of Snyder Common Stock equal to the
product of the Exchange Amount and the aggregate number of STRYPES then
outstanding. The obligation of the Contracting Stockholder to deliver shares of
Snyder Common Stock under the Contract may be cash settled, at the option of
the Contracting Stockholder, in whole or in part, by delivering to the Trust on
the Business Day immediately preceding the Exchange Date, in lieu of the shares
of Snyder Common Stock otherwise deliverable in respect of which an election to
exercise the cash settlement option is made, cash in an amount equal to the
value of such shares at the Exchange Price. In the event that the Contracting
Stockholder elects to satisfy its obligation under the Contract in whole or in
part by delivering cash, holders of the STRYPES will receive cash, or a
combination of cash and Snyder Common Stock, on the Exchange Date.
The Contract provides that, from and after a Tax Event Date (as defined
herein), the Contracting Stockholder's obligations thereunder may be
accelerated, at the option of the Contracting Stockholder, in whole but not in
part, at the Tax Event Acceleration Price (as defined herein). In such event,
the U.S. Treasury Securities will be sold by the Trust, and the proceeds
therefrom will be distributed along with the Tax Event Acceleration Price
received under the Contract after providing for any expenses of the Trust. See
"Investment Objective and Policies--The Contract--Acceleration Upon Tax Event."
The purchase price under the Contract is equal to $ in the aggregate
(assuming the Underwriters' over-allotment option is not exercised) and is
payable to the Contracting Stockholder by the Trust on or about , 1997.
No other consideration is payable by the Trust to the Contracting Stockholder
in connection with its acquisition of the Contract or the performance of the
Contract by the Contracting Stockholder. See "Investment Objective and
Policies--The Contract."
The obligations of the Contracting Stockholder under the Contract will be
secured by a pledge of the maximum number of shares of Snyder Common Stock
deliverable by the Contracting Stockholder pursuant to the Contract (subject to
adjustment in accordance with the dilution adjustment provisions of the
Contract, as described herein). See "Investment Objective and Policies--The
Contract--Collateral Arrangements; Acceleration."
RELATIONSHIP TO SNYDER COMMON STOCK
Holders of the STRYPES will receive distributions at the rate of % of the
issue price per annum. The Company has not paid any dividends on the Snyder
Common Stock since its initial public offering and has stated
5
<PAGE>
that it has no current intention to pay dividends on the Snyder Common Stock.
Any future determination as to the payment of dividends will be at the
discretion of the Company's Board of Directors and will depend upon the
Company's operating results, financial condition and capital requirements,
contractual restrictions, general business conditions and such other factors as
the Company's Board of Directors deems relevant. There can be no assurance that
the distribution yield on the STRYPES will be higher than the dividend yield on
the Snyder Common Stock over the term of the Trust. Holders of STRYPES will not
be entitled to receive any future dividends on the Snyder Common Stock unless
and until such time, if any, as the Trust shall have delivered Snyder Common
Stock in exchange for STRYPES on the Exchange Date or upon earlier dissolution
of the Trust, and unless the applicable record date for determining
stockholders entitled to receive such dividends occurs after such delivery. See
"Risk Factors--No Stockholder Rights."
The opportunity for equity appreciation afforded by an investment in the
STRYPES is less than that afforded by a direct investment in the Snyder Common
Stock because the value of the Snyder Common Stock receivable by a Holder of a
STRYPES upon exchange on the Exchange Date will exceed the issue price of such
STRYPES only if the Exchange Price exceeds the Threshold Appreciation Price,
which represents an appreciation of % over the Initial Price. Moreover, each
STRYPES will entitle the Holder to receive on the Exchange Date only % (the
percentage equal to the Initial Price divided by the Threshold Appreciation
Price) of any appreciation of the value of Snyder Common Stock above the
Threshold Appreciation Price. Holders of STRYPES will realize the entire
decline in value if the Exchange Price is less than the Initial Price. See
"Risk Factors--Limitations on Opportunity for Equity Appreciation; Potential
Losses."
DILUTION
The number of shares of Snyder Common Stock (or the amount of cash or
combination of cash and Snyder Common Stock) that Holders of STRYPES are
entitled to receive upon exchange on the Exchange Date will not be adjusted for
certain events, such as offerings of Snyder Common Stock by the Company for
cash or in connection with acquisitions. Concurrently with, but not conditioned
upon, the offering of the STRYPES, the Company and certain stockholders of the
Company are separately offering 7,721,895 shares of Snyder Common Stock
(8,880,179 shares if the underwriters' over-allotment options are exercised in
full). The Company is not restricted in connection with the STRYPES from
issuing additional shares of Snyder Common Stock during the term of the Trust.
In addition, principal stockholders of the Company are not precluded from
selling shares of Snyder Common Stock, either pursuant to Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), or by causing the
Company to register such shares. Neither the Company nor any stockholder of the
Company has any obligation to consider the interests of Holders of STRYPES for
any reason. Additional issuances or sales may materially and adversely affect
the price of Snyder Common Stock and, because of the relationship of the number
of shares of Snyder Common Stock (or the amount of cash or combination of cash
and Snyder Common Stock) to be received on the Exchange Date to the price of
the Snyder Common Stock, such other events may materially and adversely affect
the trading price of the STRYPES. There can be no assurance that the Company
will not take any of the foregoing actions, or that it will not make offerings
of, or that principal stockholders will not sell any, Snyder Common Stock in
the future, or as to the amount of any such offerings or sales. See "Risk
Factors--Dilution Adjustments."
TERM OF THE TRUST
The Trust will dissolve on or shortly after the Exchange Date, except if
dissolved earlier under certain limited circumstances. On or shortly after the
Exchange Date, the shares of Snyder Common Stock and/or cash to be exchanged
for the STRYPES and any other remaining Trust assets, net of any remaining
Trust expenses, if any, will be distributed pro rata to Holders. In the event
that a Reorganization Event (as defined below) shall have occurred, the
Contracting Stockholder shall have exercised its option to accelerate the
Contract upon the occurrence of a Tax Event or certain defaults shall have
occurred with respect to the Contracting Stockholder under the Contract or the
collateral arrangements described herein, the Contract would accelerate, the
Trust's
6
<PAGE>
assets (other than assets received pursuant to the Contract) would be
liquidated, the net assets of the Trust would be distributed pro rata to the
Holders and the term of the Trust would expire. See "Investment Objective and
Policies--The Contract," "--Acceleration Upon Tax Event," "--Trust
Dissolution," and "Risk Factors--Limited Term."
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The Trust will be taxable as a grantor trust for United States Federal income
tax purposes. Accordingly, each Holder will be treated for United States
Federal income tax purposes as the owner of its pro rata portion of the U.S.
Treasury Securities and the Contract, and income received (including original
issue discount treated as received) by the Trust will generally be treated as
income of the Holders. See "Certain United States Federal Income Tax
Considerations."
The U.S. Treasury Securities held by the Trust will be treated for United
States Federal income tax purposes as having "original issue discount" which
will accrue over the term of the U.S. Treasury Securities. It is currently
anticipated that each quarterly cash distribution to the Holders will be
treated as a tax-free return of the Holders' costs of the U.S. Treasury
Securities and any previously included original issue discount, and therefore
will not be considered current income to Holders upon receipt thereof for
United States Federal income tax purposes. However, a Holder (whether on the
cash or accrual method of tax accounting) must recognize currently as income
original issue discount on the U.S. Treasury Securities as it accrues. See
"Certain United States Federal Income Tax Considerations."
Under existing law, a Holder should not recognize income, gain or loss upon
the Trust's entry into the Contract or over the term of the Contract. In
general, the delivery of Snyder Common Stock pursuant to the Contract will not
be taxable to the Holders. A Holder will have taxable gain or loss upon receipt
of cash, if any, upon dissolution of the Trust or to the extent that the
Contracting Stockholder satisfies its obligation under the Contract in whole or
in part with cash (including upon the occurrence of a Tax Event). In general,
each Holder's initial tax basis in any Snyder Common Stock received from the
Trust on the Exchange Date or upon earlier dissolution of the Trust will be
equal to its basis in its pro rata portion of the Contract less the portion of
such basis allocable to any fractional shares of Snyder Common Stock for which
cash is received. See "Certain United States Federal Income Tax
Considerations."
MANAGEMENT ARRANGEMENTS
The Trust will be internally managed and will not have an investment adviser.
The Trust's portfolio will not be actively managed. The administration of the
Trust will be overseen by the Trustees. The day-to-day administration of the
Trust will be carried out by The Bank of New York (or its successor) as trust
administrator (the "Administrator"). The Bank of New York (or its successor)
will also act as custodian for the Trust's assets (the "Custodian") and as
paying agent, transfer agent and registrar (the "Paying Agent") with respect to
the STRYPES. Except as aforesaid, and except for The Bank of New York's role as
collateral agent under the Trust's Security and Pledge Agreement (see
"Investment Objective and Policies--The Contract--Collateral Arrangements;
Acceleration"), The Bank of New York has no other affiliation with, and is not
engaged in any other transaction with, the Trust. For their services, the
Contracting Stockholder will pay each of the Administrator, the Custodian and
the Paying Agent at the closing of the Offering a one-time, up-front amount in
respect of its fee. See "Management Arrangements."
RISK FACTORS
The Trust has adopted a fundamental policy that the Contract may not be
disposed of during the term of the Trust and that, unless the Trust dissolves
prior to the Exchange Date due to the occurrence of a "Reorganization Event,"
in the event that the Contracting Stockholder exercises its option to
accelerate the Contract upon the occurrence of a Tax Event or in the event of a
"Default" by the Contracting Stockholder, the U.S. Treasury
7
<PAGE>
Securities may not be disposed of prior to their respective maturities. The
Trust will continue to hold the Contract despite any significant decline in the
market price of the Snyder Common Stock or adverse changes in the financial
condition of the Company.
Although the STRYPES will provide investors with a current distribution yield
(the Company has not paid any dividends on the Snyder Common Stock since its
initial public offering), there is no assurance that the distribution yield on
the STRYPES will be higher than the dividend yield on the Snyder Common Stock
over the term of the Trust. In addition, the opportunity for equity
appreciation afforded by an investment in the STRYPES is less than that
afforded by a direct investment in the Snyder Common Stock. The value of the
Snyder Common Stock receivable by a Holder of a STRYPES upon exchange on the
Exchange Date will exceed the issue price of such STRYPES only if the Exchange
Price exceeds the Threshold Appreciation Price, which represents an
appreciation of % over the Initial Price. Moreover, because each STRYPES will
entitle the Holder to receive only shares of Snyder Common Stock if the
Exchange Price exceeds the Threshold Appreciation Price, Holders of the STRYPES
will be entitled to receive upon exchange only % of any appreciation of the
value of the Snyder Common Stock above the Threshold Appreciation Price. AS
DESCRIBED HEREIN, THE EXCHANGE PRICE WILL REPRESENT A DETERMINATION OF THE
VALUE OF A SHARE OF SNYDER COMMON STOCK IMMEDIATELY PRIOR TO THE EXCHANGE DATE.
ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THE AMOUNT RECEIVABLE BY HOLDERS OF
THE STRYPES ON THE EXCHANGE DATE WILL BE EQUAL TO OR GREATER THAN THE ISSUE
PRICE OF THE STRYPES. IF THE EXCHANGE PRICE OF THE SNYDER COMMON STOCK IS LESS
THAN THE INITIAL PRICE, SUCH AMOUNT RECEIVABLE ON THE EXCHANGE DATE WILL BE
LESS THAN THE ISSUE PRICE PAID FOR THE STRYPES, IN WHICH CASE AN INVESTMENT IN
STRYPES WILL RESULT IN A LOSS.
The Trust is classified as a "non-diversified" investment company under the
Investment Company Act. Consequently, the Trust is not limited by the
Investment Company Act in the proportion of its assets that may be invested in
the securities of a single issuer. Since the only securities held by the Trust
will be the U.S. Treasury Securities and the Contract, the Trust may be subject
to greater risk than would be the case for an investment company with more
diversified investments.
The trading prices of the STRYPES in the secondary market will be directly
affected by the trading prices of the Snyder Common Stock in the secondary
market. It is impossible to predict whether the price of Snyder Common Stock
will rise or fall. Trading prices of Snyder Common Stock will be influenced by
the Company's operating results and prospects and by economic, financial and
other factors and market conditions.
Holders of STRYPES will not be entitled to any rights with respect to the
Snyder Common Stock (including, without limitation, voting rights and rights to
receive any dividends or other distributions in respect thereof) unless and
until such time, if any, as the Trust shall have delivered shares of Snyder
Common Stock in exchange for STRYPES on the Exchange Date or upon earlier
dissolution of the Trust, and unless the applicable record date, if any, for
the exercise of such rights occurs after such delivery.
The bankruptcy of the Contracting Stockholder could adversely affect the time
of exchange or, as a result, the amount received by the Holders of the STRYPES.
See "Risk Factors--Risk Relating to Bankruptcy of the Contracting Stockholder."
Holders will experience a taxable event upon receipt of cash, if any, upon
dissolution of the Trust or to the extent that the Contracting Stockholder
satisfies its obligation under the Contract in whole or in part with cash.
Because of an absence of authority as to the proper character of any gain or
loss resulting from such a taxable event, the ultimate tax consequences to
Holders as a result of the Contracting Stockholder electing to satisfy its
obligation under the Contract in whole or in part with cash is uncertain. See
"Risk Factors."
LISTING
Application will be made to list the STRYPES on the NYSE.
8
<PAGE>
FEE TABLE
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load (as a percentage of offering price)..... 3%(a)
Automatic Dividend Reinvestment Plan Fees.................. Not Applicable
ANNUAL EXPENSES (as a percentage of net assets)
Management Fees(b)......................................... 0%
Other Expenses(c).......................................... 0%
--------------
TOTAL ANNUAL EXPENSES(C)..................................... 0%
==============
</TABLE>
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
EXAMPLE
An investor would pay the following expenses on a $1,000
investment, including the maximum sales load of $30 and assuming
(1) no annual expenses and (2) a 5% annual return throughout the
periods......................................................... $30 $30
</TABLE>
- --------
(a) See the cover page of this Prospectus and "Underwriting."
(b) See "Management Arrangements." The Trust will be internally managed;
consequently there is no separate investment advisory fee paid by the
Trust. The Bank of New York will act as the administrator of the Trust.
(c) The organization costs of the Trust in the amount of $ , the costs
associated with the initial registration and offering of the STRYPES
estimated to be approximately $ , and approximately $ in respect of
anticipated ongoing expenses over the term of the Trust will be paid by the
Contracting Stockholder. Any unanticipated operating expenses of the Trust
will be paid by Merrill Lynch & Co., Inc., which will be reimbursed by the
Contracting Stockholder. See "Management Arrangements--Estimated Expenses."
Absent such arrangements, the Trust's "Other Expenses" and "Total Annual
Expenses" would be approximately % of the Trust's net assets.
The foregoing Fee Table is intended to assist investors in understanding the
costs and expenses that a shareholder in the Trust will bear directly or
indirectly. The Example set forth above assumes reinvestment of all dividends
and distributions and utilizes a 5% annual rate of return as mandated by
Securities and Exchange Commission regulations. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF FUTURE EXPENSES OR ANNUAL RATES OF RETURN, AND
ACTUAL EXPENSES OR ANNUAL RATES OF RETURN MAY BE MORE OR LESS THAN THOSE
ASSUMED FOR PURPOSES OF THE EXAMPLE.
9
<PAGE>
THE TRUST
Snyder STRYPES Trust is a newly created Delaware business trust and will be
registered as a closed-end management investment company under the Investment
Company Act. The Trust was formed on August 5, 1997 pursuant to a Trust
Agreement dated as of such date (as amended and restated as of , 1997,
the "Declaration of Trust"). The term of the Trust will expire on or shortly
after , 2000, except that the Trust may be dissolved prior to such date
under certain limited circumstances. The Trust will be treated as a grantor
trust for United States Federal income tax purposes. The Trust's principal
office is located at 850 Library Avenue, Suite 204, Newark, Delaware 19715,
and its telephone number is (302) 738-6680.
USE OF PROCEEDS
The net proceeds of the Offering will be approximately $ (or
approximately $ , if the Underwriters' over-allotment option is exercised in
full), after payment of the sales load. At the time of the closing of the
Offering, or shortly thereafter, the net proceeds of the Offering will be used
to purchase a fixed portfolio comprised of a series of zero-coupon U.S.
Treasury Securities with face amounts and maturities corresponding to the
amounts and payment dates of the distributions payable with respect to the
STRYPES and to pay the purchase price under the Contract to the Contracting
Stockholder.
INVESTMENT OBJECTIVE AND POLICIES
GENERAL
The Trust will purchase and hold (i) a series of zero-coupon U.S. Treasury
Securities maturing on a quarterly basis through the Exchange Date and (ii)
the Contract with the Contracting Stockholder relating to shares of Snyder
Common Stock. The Trust's investment objective is to distribute to Holders on
a quarterly basis $ per STRYPES (which amount equals the pro rata portion of
the fixed quarterly distributions from the proceeds of the maturing U.S.
Treasury Securities held by the Trust) and, on the Exchange Date, a number of
shares (such number of shares being hereinafter referred to as the "Exchange
Amount") of Snyder Common Stock (or, under certain circumstances, cash, or a
combination of cash and Snyder Common Stock, with an equal value) per STRYPES
determined in accordance with the following Exchange Rate Formula, subject to
adjustment as a result of certain dilution events: (a) if the Exchange Price
is greater than or equal to $ per share of Snyder Common Stock (the
"Threshold Appreciation Price"), shares of Snyder Common Stock per
STRYPES, (b) if the Exchange Price is less than the Threshold Appreciation
Price but is greater than $ (the "Initial Price"), a fractional share of
Snyder Common Stock per STRYPES so that the value thereof (determined based on
the Exchange Price) equals the Initial Price and (c) if the Exchange Price is
less than or equal to the Initial Price, one share of Snyder Common Stock per
STRYPES. THERE CAN BE NO ASSURANCE THAT THE AMOUNT RECEIVABLE BY HOLDERS OF
THE STRYPES ON THE EXCHANGE DATE WILL BE EQUAL TO OR GREATER THAN THE ISSUE
PRICE OF THE STRYPES. IF THE EXCHANGE PRICE OF THE SNYDER COMMON STOCK IS LESS
THAN THE INITIAL PRICE, SUCH AMOUNT RECEIVABLE ON THE EXCHANGE DATE WILL BE
LESS THAN THE ISSUE PRICE PAID FOR THE STRYPES, IN WHICH CASE AN INVESTMENT IN
STRYPES WILL RESULT IN A LOSS. Holders otherwise entitled to receive
fractional shares of Snyder Common Stock in respect of their aggregate
holdings of STRYPES will receive cash in lieu thereof. See "Fractional
Interests." The numbers of shares of Snyder Common Stock per STRYPES specified
in clauses (a) and (c) of the Exchange Rate Formula are hereinafter referred
to as the "Share Components."
The "Exchange Price" means the average Closing Price per share of Snyder
Common Stock on the 20 Trading Days immediately prior to, but not including,
the second Trading Day preceding the Exchange Date. The "Closing Price" of any
security on any date of determination means the closing sale price (or, if no
closing price is reported, the last reported sale price) of such security on
the NYSE on such date or, if such security is not listed for trading on the
NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which such security is so
listed, or, if such security is not so listed on a
10
<PAGE>
United States national or regional securities exchange, as reported by
National Association of Securities Dealers, Inc. Automated Quotation System,
or, if such security is not so reported, the last quoted bid price for such
security in the over-the-counter market as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not available, the
market value of such security on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by
the Administrator. In the event that the Exchange Rate Formula is adjusted as
described under "--The Contract--Dilution Adjustments" below, each of the
Closing Prices used in determining the Exchange Price will be similarly
adjusted to derive, for purposes of determining which of clauses (a), (b) or
(c) of the Exchange Rate Formula will apply on the Exchange Date, an Exchange
Price stated on a basis comparable to the Initial Price and the Threshold
Appreciation Price. A "Trading Day" is defined as a day on which the security
the Closing Price of which is being determined (A) is not suspended from
trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has traded at least
once on the national or regional securities exchange or association or over-
the-counter market that is the primary market for the trading of such
security. The term "Business Day" means any day that is not a Saturday, a
Sunday or a day on which the NYSE, The NASDAQ National Market, or banking
institutions or trust companies in The City of New York are authorized or
obligated by law or executive order to close.
Pursuant to the terms of the Contract, the Contracting Stockholder is
obligated to deliver to the Trust on the Business Day immediately preceding
the Exchange Date an aggregate number of shares of Snyder Common Stock equal
to the product of the Exchange Amount and the aggregate number of STRYPES then
outstanding. The obligation of the Contracting Stockholder to deliver shares
of Snyder Common Stock under the Contract may be cash settled, at the option
of the Contracting Stockholder, in whole or in part, by delivering to the
Trust on the Business Day immediately preceding the Exchange Date, in lieu of
the shares of Snyder Common Stock otherwise deliverable in respect of which an
election to exercise the cash settlement option is made, cash in an amount
equal to the value of such shares at the Exchange Price. In the event that the
Contracting Stockholder elects to satisfy its obligation under the Contract in
whole or in part by delivering cash, Holders will receive cash, or a
combination of cash and Snyder Common Stock, on the Exchange Date. On or prior
to the twenty-sixth Business Day preceding the Exchange Date, the
Administrator will notify The Depository Trust Company (the "Depositary") and
publish a notice in The Wall Street Journal or another daily newspaper of
national circulation stating whether shares of Snyder Common Stock or cash, or
a combination thereof, will be delivered in exchange for the STRYPES on the
Exchange Date. At the time such notice is published, the Exchange Price will
not have been determined. If the Contracting Stockholder elects to deliver
shares of Snyder Common Stock, Holders will be responsible for the payment of
any and all brokerage costs upon the subsequent sale thereof.
The Trust has adopted a fundamental policy as required by the Declaration of
Trust to invest at least 65% of its portfolio in the Contract. The Contract
will comprise approximately % of the Trust's initial assets. The Trust has
also adopted a fundamental policy that the Contract may not be disposed of
during the term of the Trust and that, unless the Trust dissolves prior to the
Exchange Date due to the occurrence of a "Reorganization Event," in the event
that the Contracting Stockholder exercises its option to accelerate the
Contract upon the occurrence of a Tax Event or in the event of a "Default" by
the Contracting Stockholder, the U.S. Treasury Securities may not be disposed
of prior to their respective maturities. The foregoing fundamental policies of
the Trust may not be changed without the vote of 100% in interest of the
Holders.
TRUST ASSETS
The Trust's assets primarily will consist of: (i) U.S. Treasury Securities
and (ii) the Contract. The Trust may also make certain temporary investments.
See "--Temporary Investments." For illustrative purposes only, the following
table shows the number of shares of Snyder Common Stock or amount of cash that
a Holder would receive for each STRYPES at various Exchange Prices. The table
assumes that there will be no dilution adjustments to the Exchange Rate
Formula as described below under "--The Contract--Dilution Adjustments." There
can be no assurance that the Exchange Price will be within the range set forth
below. Given the Initial Price of $ and the Threshold Appreciation Price of
$ , a Holder would receive on the Exchange
11
<PAGE>
Date the following number of shares of Snyder Common Stock or amount of cash
(if the Contracting Stockholder elects to satisfy its obligation under the
Contract, in whole, with cash) per STRYPES:
<TABLE>
<CAPTION>
EXCHANGE PRICE OF
SNYDER COMMON NUMBER OF SHARES OF
STOCK SNYDER COMMON STOCK AMOUNT OF CASH
----------------- ------------------- --------------
<S> <C> <C>
</TABLE>
The following table sets forth information regarding the distributions to be
received on the U.S. Treasury Securities, the portion of each year's
distributions that will constitute a return of capital for United States
Federal income tax purposes and the amount of original issue discount
accruing, assuming a yield-to-maturity accrual election, on the U.S. Treasury
Securities with respect to a Holder who acquires its STRYPES at the issue
price from an Underwriter pursuant to the Offering. See "Certain United States
Federal Income Tax Considerations."
<TABLE>
<CAPTION>
ANNUAL
ANNUAL GROSS ANNUAL GROSS INCLUSION OF
DISTRIBUTIONS DISTRIBUTIONS FROM ORIGINAL ISSUE
FROM U.S. U.S. TREASURY ANNUAL RETURN DISCOUNT IN
TREASURY SECURITIES PER OF CAPITAL PER INCOME PER
YEAR SECURITIES STRYPES STRYPES STRYPES
- ---- ------------- ------------------ -------------- --------------
<S> <C> <C> <C> <C>
1997............ $ $ $ $
1998............
1999............
2000............
</TABLE>
The anticipated annual distribution of $ per STRYPES is payable quarterly
on each , , and , commencing , 1997. Quarterly
distributions on the STRYPES will consist solely of the cash received from the
proceeds of the maturing U.S. Treasury Securities held by the Trust. The Trust
will not be entitled to any future dividends that may be declared on the
Snyder Common Stock. See "Dividends and Distributions."
ENHANCED YIELD; LESS POTENTIAL FOR EQUITY APPRECIATION THAN SNYDER COMMON
STOCK; NO DEPRECIATION PROTECTION
Although the STRYPES will provide investors with a current distribution
yield (the Company has not paid any dividends on the Snyder Common Stock since
its initial public offering), there is no assurance that the distribution
yield on the STRYPES will be higher than the dividend yield on the Snyder
Common Stock over the term of the Trust. In addition, the opportunity for
equity appreciation afforded by an investment in the STRYPES is less than that
afforded by a direct investment in the Snyder Common Stock. The value of the
Snyder Common Stock receivable by a Holder of a STRYPES on the Exchange Date
will exceed the issue price of such STRYPES only if the Exchange Price exceeds
the Threshold Appreciation Price, which represents an appreciation of % of
the Initial Price. Moreover, because each STRYPES will entitle the Holder to
receive only shares of Snyder Common Stock if the Exchange Price exceeds
the Threshold Appreciation Price, Holders of the STRYPES will be entitled to
receive upon exchange only % (the percentage equal to the Initial Price
divided by the Threshold Appreciation Price) of any appreciation of the value
of the Snyder Common Stock
12
<PAGE>
above the Threshold Appreciation Price. Holders of STRYPES will realize the
entire decline in value if the Exchange Price is less than the Initial Price.
THE COMPANY
The Company is a rapidly growing international provider of complete
marketing solutions primarily to Fortune 500 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 geographic
presence, the Company seeks to provide a single source for its clients'
outsourced sales and marketing needs.
The Snyder Common Stock is traded in the U.S. on the NYSE under the symbol
"SNC." At June 30, 1997, there were approximately 77 holders of record of
Snyder Common Stock, including Cede & Co., a nominee of the Depositary, which
holds shares of Snyder Common Stock on behalf of an indeterminate number of
beneficial owners. The following table sets forth, for the fiscal periods
indicated, the range of high and low sale prices per share of Snyder Common
Stock as reported on the NYSE.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
1996
3rd Quarter (From September 24, 1996)....................... $21.75 $17.75
4th Quarter................................................. 29.38 18.63
1997
1st Quarter................................................. $33.13 $23.50
2nd Quarter................................................. 28.00 19.50
3rd Quarter (Through August 13, 1997)....................... 32.00 23.88
</TABLE>
On August 13, 1997, the closing sale price of the Snyder Common Stock on the
NYSE was $28.50 per share.
The Company has stated that it currently intends to retain future earnings
to finance its growth and development and therefore does not anticipate paying
any cash dividends on the Snyder Common Stock in the foreseeable future.
Payment of any future dividends will depend upon the future earnings and
capital requirements of the Company and other factors which the Company's
Board of Directors considers appropriate.
Holders of STRYPES will not be entitled to receive any future dividends on
the Snyder Common Stock unless and until such time, if any, as the Trust shall
have delivered Snyder Common Stock in exchange for STRYPES on the Exchange
Date or upon earlier dissolution of the Trust, and unless the applicable
record date for determining stockholders entitled to receive such dividends
occurs after such delivery. See "Risk Factors--No Stockholder Rights."
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Accordingly, the
Company files reports, proxy and information statements and other information
with the Securities and Exchange Commission (the "Commission"). Copies of such
material can be inspected and copied at the public reference facilities
maintained by the Commission at the address specified under "Additional
Information." Reports, proxy and information statements and other information
concerning the Company may also be inspected at the offices of the NYSE.
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THE COMPANY IS NOT AFFILIATED WITH THE TRUST, WILL NOT RECEIVE ANY OF THE
PROCEEDS FROM THE SALE OF THE STRYPES AND WILL HAVE NO OBLIGATIONS WITH
RESPECT TO THE STRYPES. THIS PROSPECTUS RELATES ONLY TO THE STRYPES OFFERED
HEREBY AND DOES NOT RELATE TO THE COMPANY OR THE SNYDER COMMON STOCK. THE
COMPANY HAS FILED A REGISTRATION STATEMENT ON FORM S-1 WITH THE COMMISSION
WITH RESPECT TO THE SHARES OF SNYDER COMMON STOCK THAT MAY BE RECEIVED BY A
HOLDER OF STRYPES ON THE EXCHANGE DATE OR UPON EARLIER DISSOLUTION OF THE
TRUST. THE PROSPECTUS OF THE COMPANY (THE "SNYDER PROSPECTUS") CONSTITUTING A
PART OF SUCH REGISTRATION STATEMENT INCLUDES INFORMATION RELATING TO THE
COMPANY AND THE SNYDER COMMON STOCK, INCLUDING CERTAIN RISK FACTORS RELEVANT
TO AN INVESTMENT IN SNYDER COMMON STOCK. THE SNYDER PROSPECTUS IS BEING
ATTACHED HERETO AND DELIVERED TO PROSPECTIVE PURCHASERS OF STRYPES TOGETHER
WITH THIS PROSPECTUS FOR CONVENIENCE OF REFERENCE ONLY. THE SNYDER PROSPECTUS
DOES NOT CONSTITUTE A PART OF THIS PROSPECTUS, NOR IS IT INCORPORATED BY
REFERENCE HEREIN.
THE CONTRACT
General. Pursuant to the terms of the Contract, the Contracting Stockholder
is obligated to deliver to the Trust on the Business Day immediately preceding
the Exchange Date an aggregate number of shares of Snyder Common Stock equal
to the product of the Exchange Amount and the aggregate number of STRYPES then
outstanding. The obligation of the Contracting Stockholder to deliver shares
of Snyder Common Stock under the Contract may be cash settled, at the option
of the Contracting Stockholder, in whole or in part, by delivering to the
Trust on the Business Day immediately preceding the Exchange Date, in lieu of
the shares of Snyder Common Stock otherwise deliverable in respect of which an
election to exercise the cash settlement option is made, cash in an amount
(calculated to the nearest 1/100th of a dollar or, if there is not a nearest
1/100th of a dollar, then to the next higher 1/100th of a dollar) equal to the
value of such shares at the Exchange Price. In the event that the Contracting
Stockholder elects to satisfy its obligation under the Contract in whole or in
part by delivering cash, holders of the STRYPES will receive cash, or a
combination of cash and Snyder Common Stock, on the Exchange Date.
Dilution Adjustments. The Exchange Rate Formula is subject to adjustment if
the Company shall: (i) pay a stock dividend or make a distribution with
respect to Snyder Common Stock in shares of such stock; (ii) subdivide or
split the outstanding shares of Snyder Common Stock into a greater number of
shares; (iii) combine the outstanding shares of Snyder Common Stock into a
smaller number of shares; (iv) issue by reclassification of shares of Snyder
Common Stock any shares of common stock of the Company; (v) issue rights or
warrants to all holders of Snyder Common Stock entitling them to subscribe for
or purchase shares of Snyder Common Stock at a price per share less than the
then current market price of the Snyder Common Stock (other than rights to
purchase Snyder Common Stock pursuant to a plan for the reinvestment of
dividends or interest); or (vi) pay a dividend or make a distribution to all
holders of Snyder Common Stock of evidences of its indebtedness or other
assets (excluding any stock dividends or distributions referred to in clause
(i) above or any cash dividends other than any Extraordinary Cash Dividends
(as defined below)) or issue to all holders of Snyder Common Stock rights or
warrants to subscribe for or purchase any of its securities (other than those
referred to in clause (v) above).
In the case of the events referred to in clauses (i), (ii), (iii) and (iv)
above, the Exchange Rate Formula shall be adjusted so that the Trust will
receive on the Business Day immediately preceding the Exchange Date the number
of shares of Snyder Common Stock (or, in the case of a reclassification
referred to in clause (iv) above, the number of shares of other common stock
of the Company issued pursuant thereto) which the Trust would have owned or
been entitled to receive immediately following any event described above had
the Contracting Stockholder's obligations under the Contract been satisfied
immediately prior to such event or any record date with respect thereto.
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In the case of the event referred to in clause (v) above, the Exchange Rate
Formula shall be adjusted by multiplying each of the Share Components in the
Exchange Rate Formula in effect immediately prior to the date of issuance of
the rights or warrants referred to in clause (v) above by a fraction, the
numerator of which shall be the number of shares of Snyder Common Stock
outstanding on the date of issuance of such rights or warrants, immediately
prior to such issuance, plus the number of additional shares of Snyder Common
Stock offered for subscription or purchase pursuant to such rights or
warrants, and the denominator of which shall be the number of shares of Snyder
Common Stock outstanding on the date of issuance of such rights or warrants,
immediately prior to such issuance, plus the number of additional shares of
Snyder Common Stock which the aggregate offering price of the total number of
shares of Snyder Common Stock so offered for subscription or purchase pursuant
to such rights or warrants would purchase at the current market price
(determined as the average Closing Price per share of Snyder Common Stock on
the 20 Trading Days immediately prior to the date such rights or warrants are
issued, subject to certain adjustments), which shall be determined by
multiplying such total number of shares by the exercise price of such rights
or warrants and dividing the product so obtained by such current market price.
To the extent that shares of Snyder Common Stock are not delivered after the
expiration of such rights or warrants, or if such rights or warrants are not
issued, the Exchange Rate Formula shall be readjusted to the Exchange Rate
Formula which would then be in effect had such adjustments for the issuance of
such rights or warrants been made upon the basis of delivery of only the
number of shares of Snyder Common Stock actually delivered.
In the case of the event referred to in clause (vi) above, the Exchange Rate
Formula shall be adjusted by multiplying each of the Share Components in the
Exchange Rate Formula in effect on the record date referred to below by a
fraction, the numerator of which shall be the market price per share of Snyder
Common Stock on the record date for the determination of stockholders entitled
to receive the dividend or distribution or the rights or warrants referred to
in clause (vi) above (such market price being determined as the average
Closing Price per share of Snyder Common Stock on the 20 Trading Days
immediately prior to such record date, subject to certain adjustments), and
the denominator of which shall be such market price per share of Snyder Common
Stock less the fair market value (as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Administrator, whose determination shall be conclusive) as of such record date
of the portion of the assets or evidences of indebtedness to be distributed or
of such subscription rights or warrants applicable to one share of Snyder
Common Stock.
An "Extraordinary Cash Dividend" means, with respect to any consecutive 12-
month period, the amount, if any, by which the aggregate amount of all cash
dividends on the Snyder Common Stock occurring in such 12-month period
(excluding any such dividends occurring in such period for which a prior
adjustment to the Exchange Rate Formula was previously made) exceeds on a per
share basis 10% of the average of the Closing Prices per share of the Snyder
Common Stock over such 12-month period. All adjustments to the Exchange Rate
Formula will be calculated to the nearest 1/10,000th of a share of Snyder
Common Stock (or if there is not a nearest 1/10,000th of a share to the next
lower 1/10,000th of a share). No adjustment in the Exchange Rate Formula shall
be required unless such adjustment would require an increase or decrease of at
least one percent therein; provided, however, that any adjustments which by
reason of the foregoing are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. If an adjustment is made
to the Exchange Rate Formula as described above, an adjustment will also be
made to the Exchange Price solely to determine which of clauses (a), (b) or
(c) of the Exchange Rate Formula will apply on the Exchange Date. The required
adjustment to the Exchange Price will be made by multiplying each of the
Closing Prices used in determining the Exchange Price by a fraction, the
numerator of which shall be the Share Component in clause (c) of the Exchange
Rate Formula immediately after such adjustment described above, and the
denominator of which shall be the Share Component in clause (c) of the
Exchange Rate Formula immediately before such adjustment described above. Each
such adjustment to the Exchange Rate Formula shall be made successively.
In the event of a statutory merger effected solely for the purpose of
changing the state of incorporation of the Company, or any surviving entity or
subsequent surviving entity of the Company (a "Company Successor"), the
Exchange Rate Formula shall be adjusted so that the Trust will receive on the
Business Day immediately
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preceding the Exchange Date the number of shares of capital stock of the
continuing corporation in such statutory merger which the Trust would have
owned or been entitled to receive immediately following such statutory merger
had the Contracting Stockholder's obligations under the Contract been
satisfied immediately prior to the effective date for such statutory merger.
The Administrator is required, within ten Business Days following the
occurrence of an event that requires an adjustment to the Exchange Rate
Formula (or if the Administrator is not aware of such occurrence, as soon as
practicable after becoming so aware), to provide written notice to the Holders
of the occurrence of such event and a statement in reasonable detail setting
forth the adjusted Exchange Rate Formula and the method by which the
adjustment to the Exchange Rate Formula was determined, provided that, in
respect of any adjustment to the Exchange Price, such notice will only
disclose the factor by which each of the Closing Prices used in determining
the Exchange Price is so multiplied in order to determine the Exchange Amount
on the Exchange Date. Until the Exchange Date, it will not be possible to
determine the Exchange Amount.
No adjustments will be made for certain other events, such as offerings of
Snyder Common Stock by the Company for cash or in connection with
acquisitions. Likewise, no adjustments will be made for any sales of Snyder
Common Stock by any principal stockholder of the Company.
Reorganization Events Causing a Dissolution of the Trust. In the event of
(A) any consolidation or merger of the Company or any Company Successor with
or into another entity (other than (x) a consolidation or merger in which the
Company is the continuing corporation and in which the Snyder Common Stock
outstanding immediately prior to the consolidation or merger is not exchanged
for cash, securities or other property of the Company or another corporation
or (y) a statutory merger effected solely for the purpose of changing the
state of incorporation of the Company or a Company Successor), (B) any sale,
transfer, lease or conveyance to another entity of the property of the Company
or any Company Successor as an entirety or substantially as an entirety, (C)
any statutory exchange of securities of the Company or any Company Successor
with another entity (other than in connection with a merger or acquisition) or
(D) any liquidation, dissolution or winding up of the Company or any Company
Successor (other than any liquidation, dissolution or winding up constituting
an Event of Default) (any such event described in clause (A), (B), (C) or (D),
a "Reorganization Event"), the Contracting Stockholder's obligations under the
Contract shall be automatically accelerated and the Contracting Stockholder
shall be obligated to deliver to the Trust, on the tenth Business Day after
the effective date for such Reorganization Event (the "Early Settlement
Date"), an amount of cash per STRYPES equal to: (i) if the Transaction Value
(as defined below) is greater than or equal to the Threshold Appreciation
Price, multiplied by the Transaction Value, (ii) if the Transaction Value
is less than the Threshold Appreciation Price but greater than the Initial
Price, the Initial Price, and (iii) if the Transaction Value is less than or
equal to the Initial Price, the Transaction Value. "Transaction Value" means
(i) for any cash received in any such Reorganization Event, the amount of cash
received per share of Snyder Common Stock, (ii) for any property other than
cash or securities received in any such Reorganization Event, an amount equal
to the market value on the date the Reorganization Event is consummated of
such property received per share of Snyder Common Stock as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Administrator and (iii) for any securities received in any such
Reorganization Event, an amount equal to the average Closing Price per unit of
such securities on the 20 Trading Days immediately prior to the second Trading
Day preceding the Early Settlement Date, multiplied by the number of such
securities received for each share of Snyder Common Stock. Notwithstanding the
foregoing, if any Marketable Securities (as defined below) are received by
holders of Snyder Common Stock in such Reorganization Event, then in lieu of
delivering cash as provided above, the Contracting Stockholder may at its
option deliver a proportional amount of such Marketable Securities. If the
Contracting Stockholder elects to deliver Marketable Securities, Holders will
be responsible for the payment of any and all brokerage and other transaction
costs upon the sale of such securities. "Marketable Securities" means any
securities listed on a U.S. national securities exchange or reported by The
NASDAQ National Market.
IF A REORGANIZATION EVENT OCCURS, THE TRUST'S ASSETS (OTHER THAN ASSETS
RECEIVED PURSUANT TO THE CONTRACT) WILL BE LIQUIDATED, THE NET ASSETS OF THE
TRUST WILL BE DISTRIBUTED PRO RATA TO THE HOLDERS AND THE
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TERM OF THE TRUST WILL EXPIRE. In such event, the U.S. Treasury Securities
will be sold by the Trust, and the proceeds therefrom will be distributed
along with the cash (or Marketable Securities) received under the Contract on
the Early Settlement Date after providing for any expenses of the Trust.
Acceleration Upon Tax Event. Pursuant to the terms of the Contract, the
Contracting Stockholder's obligation under the Contract may be accelerated, at
the option of the Contracting Stockholder, in whole but not in part, at any
time from and after the date (the "Tax Event Date") on which a Tax Event (as
defined below) shall occur at a price per STRYPES (the "Tax Event Acceleration
Price") equal to (a) an amount of cash equal to the sum of (i) all accumulated
and unpaid distributions on such STRYPES to the date fixed for acceleration
(the "Tax Event Acceleration Date"), (ii) the sum of all distributions on such
STRYPES due after the Tax Event Acceleration Date and on or prior to the
Exchange Date and (iii) $ (equal to the distributions payable on such
STRYPES for one year), minus (b) the Liquidation Value (as defined below),
plus (c) a number of shares of Snyder Common Stock equal to the number that
would be required to be delivered on such date under the Contract if the
Exchange Date were redefined for all purposes to be the Tax Event Acceleration
Date. The obligation of the Contracting Stockholder to deliver shares of
Snyder Common Stock on the Tax Event Acceleration Date as described in clause
(c) above may be cash settled, at the option of the Contracting Stockholder,
in whole or in part, by delivering to the Trust on Tax Event Acceleration
Date, in lieu of the shares of Snyder Common Stock otherwise deliverable on
the Tax Event Acceleration Date in respect of which an election to exercise
the cash settlement option (the "Tax Event Cash Settlement Option") is made,
cash in an amount (calculated to the nearest 1/100th of a dollar or, if there
is not a nearest 1/100th of a dollar, then to the next higher 1/100th of a
dollar) equal to the value of such shares at the average Closing Price per
share of Snyder Common Stock on the 20 Trading Days immediately prior to, but
not including, the second Trading Day preceding the Tax Event Acceleration
Date.
A "Tax Event" means that the Contracting Stockholder shall have delivered to
the Trust an opinion (the "Tax Event Opinion") from a nationally recognized
independent tax counsel experienced in such matters to the effect that, as a
result of (a) any amendment to, or change in, the laws (or any regulations
thereunder) of the United States or any taxing authority thereof or therein or
(b) any amendment to, clarification of, or change in, an interpretation or
application of such laws or regulations by any legislative body, court,
governmental agency or regulatory authority, enacted or promulgated, or which
interpretation is issued or which action is taken, on or after the date of
this Prospectus, there is more than an insubstantial risk that, by reason of
the Contracting Stockholder having entered into the Contract, the Contracting
Stockholder would be required to recognize gain for United States Federal
income tax purposes with respect to shares of Snyder Common Stock deliverable
under the Contract on a date that is prior to the Business Day immediately
preceding the Exchange Date.
The "Liquidation Value" is defined as the amount of the aggregate proceeds
received by the Trust from the sale of the U.S. Treasury Securities allocable
to one STRYPES, which shall be determined by the Trustees on the basis of
quotations from independent dealers. Upon receipt of any notice from the
Contracting Stockholder that it is exercising its option to accelerate the
Contract following the occurrence of a Tax Event, the Trustees on the second
Business Day immediately preceding the Tax Event Acceleration Date shall
solicit cash bids, for settlement on the Business Day immediately preceding
the Tax Event Acceleration Date, from three (or such fewer number of dealers
as may be providing such bids) United States government securities primary
dealers in The City of New York selected by the Trustees after consultation
with the Contracting Stockholder (which may include the Administrator or its
affiliates) for the purchase by the quoting dealer of all U.S. Treasury
Securities then held by the Trust. If for any reason the Trustees are unable
to obtain the required bid on the second Business Day preceding the Tax Event
Acceleration Date, the Trustees shall attempt to obtain such bid daily until
they are able to obtain the required bid. The Trustees shall accept the
highest bid received that will result in the greatest amount of proceeds from
the sale of the U.S. Treasury Securities then held by the Trust and shall sell
all such U.S. Treasury Securities at that highest bid.
On August 5, 1997, the Taxpayer Relief Act of 1997 (the "Tax Act") was
enacted into law. The Tax Act adds new Section 1259 to the Internal Revenue
Code of 1986, as amended (the "Code"). In general, Section 1259 of the Code
requires taxpayers (including corporations) to recognize gain (but not loss)
upon entering into
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a "constructive sale" of any appreciated position in stock. For these
purposes, a taxpayer is treated as making a "constructive sale" of an
appreciated position in stock when the taxpayer (or a person related to the
taxpayer) enters into a forward contract to deliver the stock. A "forward
contract" is defined for these purposes as a contract to deliver a
substantially fixed amount of property for a substantially fixed price.
Section 1259 of the Code generally applies to constructive sales entered into
after June 8, 1997. The Contracting Stockholder does not believe that it will
be considered to have made a constructive sale of any of its Snyder Common
Stock as a result of having entered into the Contract. There can be no
assurance, however, that future guidance will not be issued under Section 1259
of the Code which would indicate that the Contracting Stockholder has made a
constructive sale of its shares of Snyder Common Stock as a result of having
entered into the Contract. If future guidance is issued indicating that the
Contracting Stockholder has made a constructive sale of its Snyder Common
Stock as a result of having entered into the Contract, such guidance could
result in a Tax Event. It cannot be predicted whether or not any future
guidance will be issued under Section 1259 of the Code which could give rise
to a Tax Event, nor can it be predicted whether the Contracting Stockholder
will elect to cause a Tax Event by delivering the Tax Event Opinion to the
Trust in the event that future guidance is issued under Section 1259 of the
Code which could give rise to a Tax Event.
The Administrator will provide notice of the Contracting Stockholder's
election to exercise its acceleration option to Holders of record of the
STRYPES not less than nine calendar days (14 calendar days if the Tax Event
Cash Settlement Option is elected) nor more than 30 calendar days prior to the
related Tax Event Acceleration Date. Such notice will state the following and
may contain such other information as the Administrator deems advisable: (a)
the Tax Event Acceleration Date, (b) whether the Contracting Stockholder has
elected to exercise the Tax Event Cash Settlement Option, and (c) that
distributions will cease to accumulate on the STRYPES on the Tax Event
Acceleration Date. Any such notice will be provided by mail, sent to each
Holder of record at such Holder's address as it appears on the register for
the STRYPES, first class, postage prepaid. At or prior to the mailing of such
notice of acceleration, the Administrator will publish a public announcement
in The Wall Street Journal or another daily newspaper of national circulation.
At the time such announcement is published, neither the Exchange Price nor the
Liquidation Value will have been determined.
Collateral Arrangements; Acceleration. Pursuant to a Security and Pledge
Agreement among the Contracting Stockholder, the Trust and The Bank of New
York, as collateral agent (the "Collateral Agent"), the Contracting
Stockholder's obligations under the Contract will be secured by a security
interest in the maximum number of shares of Snyder Common Stock deliverable by
the Contracting Stockholder under the Contract (subject to adjustment in
accordance with the dilution adjustment provisions of the Contract, described
above). The Collateral Agent will promptly pay over to the Contracting
Stockholder any dividends, interest, principal or other payments received by
the Collateral Agent in respect of any collateral pledged by the Contracting
Stockholder, unless the Contracting Stockholder is in "Default" or unless the
payment of such amount to the Contracting Stockholder would cause the
collateral to become insufficient under the Security and Pledge Agreement. The
Contracting Stockholder shall have the right to vote any pledged shares of
Snyder Common Stock for so long as such shares are owned by it and pledged
under the Security and Pledge Agreement, unless the Contracting Stockholder is
in "Default."
A "Collateral Event of Default" under the Security and Pledge Agreement
shall mean, at any time, failure of the collateral to consist of at least the
maximum number of shares of Snyder Common Stock deliverable by the Contracting
Stockholder under the Contract at such time if such failure is not remedied on
or before the third Business Day after notice of such failure is given to the
Contracting Stockholder.
The occurrence of a Collateral Event of Default under the Security and
Pledge Agreement or the bankruptcy or insolvency of the Contracting
Stockholder (each such event, a "Default") will cause an automatic
acceleration of the Contracting Stockholder's obligations under the Contract.
In any such event, the Contracting Stockholder will become obligated to
deliver a number of shares of Snyder Common Stock having an aggregate value
equal to the "Aggregate Acceleration Value" of the Contract. The Aggregate
Acceleration Value will be based on an "Acceleration Value" determined by the
Administrator on the basis of quotations from independent dealers. Each
quotation will be for an amount that would be paid to the relevant dealer in
consideration of an agreement
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between the Trust and such dealer that would have the effect of preserving the
Trust's rights to receive shares of Snyder Common Stock under a portion of the
Contract that corresponds to 1,000 of the STRYPES offered hereby. The
Administrator will request quotations from four nationally recognized
independent dealers on or as soon as reasonably practicable following the date
of acceleration. If four quotations are provided, the Acceleration Value will
be the arithmetic mean of the two quotations remaining after disregarding the
highest and the lowest quotations. If two or three quotations are provided,
the Acceleration Value will be the arithmetic mean of such quotations. If one
quotation is provided, the Acceleration Value will be such quotation. The
Aggregate Acceleration Value will be computed by dividing the Acceleration
Value by 1,000 and multiplying the quotient by the aggregate number of STRYPES
then outstanding, except that, if no quotations are provided, the Aggregate
Acceleration Value will be the product of the average Closing Price per share
of Snyder Common Stock on the 20 Trading Days immediately prior to the second
Trading Day preceding the acceleration date and the number of shares of Snyder
Common Stock that would be required to be delivered on such date under the
Contract if the Exchange Date were redefined for all purposes to be the
acceleration date. Upon the occurrence of a Default, the number of shares of
Snyder Common Stock deliverable for each STRYPES will be based solely on the
Aggregate Acceleration Value described above for the Contract.
The Collateral Agent is a "financial institution" for purposes of Sections
555 and 101(22) of Title 11 of the United States Code (the "Bankruptcy Code").
The Trust believes that the Collateral Agent will be the agent and custodian
for the Trust such that the Trust will be a "financial institution" as defined
in Section 101(22) of the Bankruptcy Code. Upon any acceleration, the
Collateral Agent will distribute to the Trust, for distribution pro rata to
the Holders, the Aggregate Acceleration Value in the form of shares of Snyder
Common Stock then pledged. See "--Trust Dissolution."
Fractional Shares and Units. No fractional share of Snyder Common Stock will
be delivered to the Trust if the Contracting Stockholder satisfies its
obligations under the Contract in whole or in part by delivering shares of
Snyder Common Stock. In lieu of any fractional share otherwise deliverable in
respect of the Contracting Stockholder's obligations under the Contract, the
Trust shall be entitled to receive an amount in cash equal to the value of
such fractional share based on the average Closing Price per share of Snyder
Common Stock on the 20 Trading Days immediately prior to, but not including,
the second Trading Day preceding the Exchange Date. No fractional unit of any
Marketable Security will be delivered to the Trust if the Contracting
Stockholder elects to deliver Marketable Securities on any Early Settlement
Date. In lieu of any fractional unit otherwise deliverable on the Early
Settlement Date in respect of the Contracting Stockholder's obligations under
the Contract, the Trust shall be entitled to receive an amount in cash equal
to the value of such fractional unit based on the average Closing Price per
unit of such Marketable Security on the 20 Trading Days immediately prior to,
but not including, the second Trading Day preceding the Early Settlement Date.
Description of Contracting Stockholder. The Contracting Stockholder is ,
LLC. Specific information regarding the holdings of Snyder Common Stock by the
Contracting Stockholder is included in the accompanying prospectus of the
Company with respect to the shares of Snyder Common Stock which may be
received by a Holder of STRYPES on the Exchange Date or upon earlier
dissolution of the Trust.
Purchase Price. The purchase price under the Contract is equal to $ in
the aggregate and is payable to the Contracting Stockholder by the Trust on or
about , 1997. No other consideration is payable by the Trust to the
Contracting Stockholder in connection with its acquisition of the Contract or
the performance of the Contract by the Contracting Stockholder.
The Contract will be valued by the Trust at fair value as determined in good
faith at the direction of the Trustees (if necessary, through consultation
with accountants, bankers and other specialists). See "Net Asset Value."
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THE U.S. TREASURY SECURITIES
The Trust will purchase and hold a series of zero-coupon U.S. Treasury
Securities with face amounts and maturities corresponding to the amounts and
payment dates of the distributions payable with respect to the STRYPES. Up to
% of the Trust's total assets may be invested in these U.S. Treasury
Securities. In the event that the Contract is accelerated as described under
"--Reorganization Event Causing a Termination of the Trust," "--Acceleration
Upon Tax Event" or "--Collateral Arrangements; Acceleration," the
Administrator will liquidate any such U.S. Treasury Securities then held in
the Trust and distribute the proceeds therefrom pro rata to the Holders,
together with amounts distributed upon acceleration.
TEMPORARY INVESTMENTS
To the extent necessary to enable the Paying Agent to make the next
succeeding quarterly distribution, any moneys deposited with or received by
the Trust will be invested by the Paying Agent in short-term obligations of
the U.S. Government maturing no later than the Business Day preceding the next
following distribution date.
TRUST DISSOLUTION
The Trust will dissolve on or shortly after the Exchange Date, except if
dissolved earlier under certain limited circumstances. Although the Trust has
adopted a fundamental policy that it will not dispose of the Contract prior to
the Exchange Date, under certain circumstances the Contract may terminate
prior to the Exchange Date. In the event that a Reorganization Event shall
have occurred, the Contracting Stockholder shall have exercised its option to
accelerate the Contract upon the occurrence of a Tax Event or a Default shall
have occurred with respect to the Contracting Stockholder, the Trust's assets
(other than assets received pursuant to the Contract) would be liquidated, the
net assets of the Trust would be distributed pro rata to the Holders and the
term of the Trust would expire. See "--The Contract--Reorganization Event
Causing Termination of the Trust," "--Acceleration Upon Tax Event" and "--
Collateral Arrangements; Acceleration."
Written notice of any dissolution shall be sent to Holders specifying the
record date for the distribution to Holders, the amount distributable
(including, if applicable, the number of shares of Snyder Common Stock or, if
a Reorganization Event shall have occurred, the number of units of any
Marketable Security) with respect to each STRYPES and the time of dissolution
as determined by the Trustees. Any such notice will be provided by mail, sent
to each Holder at such Holder's address as it appears on the register for the
STRYPES, first class, postage prepaid not less than nine days prior to the
date on which such distribution is to be made. At or prior to the mailing of
such notice, the Administrator shall publish a public announcement in The Wall
Street Journal or another daily newspaper of national circulation.
FRACTIONAL SHARES AND UNITS
No fractional shares of Snyder Common Stock, or fractional units of any
Marketable Security, will be distributed by the Trust to Holders of STRYPES on
the Exchange Date or upon earlier dissolution of the Trust. All fractional
shares or units to which Holders of STRYPES would otherwise be entitled on the
Exchange Date or upon earlier dissolution of the Trust will be aggregated and
liquidated by the Administrator and, in lieu of the fractional share or units
to which a Holder would otherwise have been entitled in respect of the total
number of STRYPES held by such Holder, such Holder will receive its pro rata
portion of the proceeds from such liquidation.
INVESTMENT RESTRICTIONS
The Trust has adopted a fundamental policy that the Trust may not purchase
any securities or instruments other than the U.S. Treasury Securities, the
Contract and the Snyder Common Stock or other assets received pursuant to the
Contract and, for cash management purposes, short-term obligations of the U.S.
Government; issue any securities or instruments except for the STRYPES; make
short sales or purchase securities on margin;
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write put or call options; borrow money; underwrite securities; purchase or
sell real estate, commodities or commodities contracts; or make loans. The
Trust has adopted a fundamental policy to invest at least 65% of its portfolio
in the Contract. The Trust has also adopted a fundamental policy that the
Contract may not be disposed of during the term of the Trust and that, unless
the Trust dissolves prior to the Exchange Date due to the occurrence of a
Reorganization Event, in the event that the Contracting Stockholder exercises
its option to accelerate the Contract upon the occurrence of a Tax Event or in
the event of a Default by the Contracting Stockholder, the U.S. Treasury
Securities may not be disposed of prior to their respective maturities.
Because of the foregoing limitations, the Trust's investments will be
concentrated initially in the marketing services industry, which is the
industry in which the Company currently operates. However, to the extent that
in the future the Company diversifies its operations into one or more other
industries, the Trust's investments will be less concentrated in the marketing
services industry.
RISK FACTORS
NO ACTIVE PORTFOLIO MANAGEMENT
It is a fundamental policy of the Trust that the Contract may not be
disposed of during the term of the Trust and that, unless the Trust dissolves
prior to the Exchange Date due to the occurrence of a Reorganization Event, in
the event that the Contracting Stockholder exercises its option to accelerate
the Contract upon the occurrence of a Tax Event or in the event of a Default
by the Contracting Stockholder, the U.S. Treasury Securities may not be
disposed of prior to their respective maturities. As a result, the Trust will
continue to hold the Contract despite any significant decline in the market
price of the Snyder Common Stock or adverse changes in the financial condition
of the Company. The Trust will not be managed like a typical closed-end
investment company.
ABSENCE OF TRADING HISTORY; MARKETABILITY; POSSIBILITY OF THE STRYPES TRADING
AT A DISCOUNT FROM NET ASSET VALUE
The STRYPES have no trading history and it is not possible to predict how
they will trade in the secondary market. The trading price of the STRYPES may
vary considerably prior to the Exchange Date due to, among other things,
fluctuations in trading prices of the Snyder Common Stock (which may occur due
to changes in the Company's financial condition, results of operations or
prospects, or because of complex and interrelated political, economic,
financial and other factors that can affect the capital markets generally, the
stock exchanges or quotation systems on which the Snyder Common Stock is
traded and the market segment of which the Company is a part) and fluctuations
in interest rates and other factors that are difficult to predict and beyond
the Trust's control.
The Underwriters currently intend, but are not obligated, to make a market
in the STRYPES. There can be no assurance that a secondary market will develop
or, if a secondary market does develop, that it will provide the Holders of
the STRYPES with liquidity of investment or that it will continue for the life
of the STRYPES. Application will be made to list the STRYPES on the NYSE.
There can be no assurance that such application will be accepted or that, if
accepted, the STRYPES will not later be delisted or that trading in the
STRYPES on the NYSE will not be suspended. In the event of a delisting or
suspension of trading on such exchange, the Trust will apply for listing of
the STRYPES on another national securities exchange or for quotation on
another trading market. If the STRYPES are not listed or traded on any
securities exchange or trading market, or if trading of the STRYPES is
suspended, pricing information for the STRYPES may be more difficult to
obtain, and the price and liquidity of the STRYPES may be adversely affected.
The Trust is a newly organized closed-end investment company with no
previous operating history. Shares of closed-end investment companies
frequently trade at a discount from their net asset value, which is a risk
separate and distinct from the risk that the Trust's net asset value will
decrease. The Trust cannot predict whether the STRYPES will trade at, below or
above their net asset value. The risk of purchasing investments that might
trade at a discount is more pronounced for investors who wish to sell their
investments in a relatively short period
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of time after completion of the Trust's initial public offering because for
those investors realization of a gain or loss on their investments is likely
to be more dependent upon the existence of a premium or discount than upon
portfolio performance. STRYPES are not subject to redemption.
DILUTION ADJUSTMENTS
The number of shares of Snyder Common Stock (or the amount of cash or
combination of cash and Snyder Common Stock) that the Trust is entitled to
receive pursuant to the Contract on the Business Day immediately preceding the
Exchange Date or upon acceleration of the Contract is subject to adjustment
for certain events arising from stock splits and combinations, stock dividends
and certain other actions of the Company that modify its capital structure.
See "Investment Objective and Policies--The Contract--Dilution Adjustments."
Such number of shares of Snyder Common Stock (or the amount of cash or
combination of cash and Snyder Common Stock) to be received by the Trust will
not be adjusted for other events, such as offerings of Snyder Common Stock for
cash or in connection with acquisitions.
Concurrently with, but not conditioned upon, the offering of the STRYPES,
the Company and certain stockholders of the Company are separately offering
7,721,895 shares of Snyder Common Stock (8,880,179 shares if the underwriters'
over-allotment options are exercised in full). The Company is not restricted
in connection with the STRYPES from issuing additional shares of Snyder Common
Stock during the term of the Trust. In addition, the principal stockholders of
the Company are not precluded from selling shares of Snyder Common Stock,
either pursuant to Rule 144 under the Securities Act or by causing the Company
to register such shares. Neither the Company nor any stockholder of the
Company has any obligation to consider the interests of the Holders of the
STRYPES for any reason. Additional issuances or sales may materially and
adversely affect the price of the Snyder Common Stock and, because of the
relationship of the number of shares of Snyder Common Stock (or the amount of
cash or combination of cash and Snyder Common Stock) to be received pursuant
to the Contract to the price of the Snyder Common Stock, such other events may
materially and adversely affect the trading price of the STRYPES. There can be
no assurance that the Company will not take any of the foregoing actions, or
that it will not make offerings of, or that principal stockholders will not
sell any, Snyder Common Stock in the future, or as to the amount of any such
offerings or sales.
LIMITED TERM
The term of the Trust will expire on or shortly after the Exchange Date,
unless the Trust is dissolved earlier under certain limited circumstances. On
or shortly after the Exchange Date, the Trust will distribute the shares of
Snyder Common Stock and/or cash received by the Trust pursuant to the Contract
and other net assets held by the Trust pro rata to Holders and dissolve
shortly thereafter. In the event that a Reorganization Event shall have
occurred, the Contracting Stockholder shall have exercised its option to
accelerate the Contract upon the occurrence of a Tax Event or a Default shall
have occurred with respect to the Contracting Stockholder, the Trust's assets
(other than assets received pursuant to the Contract) would be liquidated, the
net assets of the Trust would be distributed pro rata to Holders and the term
of the Trust would expire.
NON-DIVERSIFIED PORTFOLIO
The Trust's assets will consist almost entirely of the Contract and the U.S.
Treasury Securities. As a result, investments in the Trust may be subject to
greater risk than would be the case for a company with a more diversified
portfolio of investments.
COMPARISON TO OTHER EQUITY SECURITIES; RELATIONSHIP TO SNYDER COMMON STOCK
The terms of the STRYPES are similar to those of ordinary equity securities
in that the value of the Snyder Common Stock (or, pursuant to the right of the
Contracting Stockholder, the amount of cash or combination of cash and Snyder
Common Stock) that a holder of a STRYPES will receive on the Exchange Date is
not fixed, but is based on the Exchange Price of the Snyder Common Stock (see
"Investment Objective and Policies--
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General" and "--The Contract"). THERE CAN BE NO ASSURANCE THAT SUCH AMOUNT
RECEIVABLE BY THE HOLDER ON THE EXCHANGE DATE WILL BE EQUAL TO OR GREATER THAN
THE ISSUE PRICE PAID FOR THE STRYPES. IF THE EXCHANGE PRICE OF THE SNYDER
COMMON STOCK IS LESS THAN THE INITIAL PRICE, SUCH AMOUNT RECEIVABLE ON THE
EXCHANGE DATE WILL BE LESS THAN THE ISSUE PRICE PAID FOR THE STRYPES, IN WHICH
CASE AN INVESTMENT IN STRYPES WILL RESULT IN A LOSS. ACCORDINGLY, A HOLDER OF
STRYPES ASSUMES THE RISK THAT THE MARKET VALUE OF THE SNYDER COMMON STOCK MAY
DECLINE, AND THAT SUCH DECLINE COULD BE SUBSTANTIAL. REFERENCE IS MADE TO THE
ACCOMPANYING PROSPECTUS OF THE COMPANY, INCLUDING THE INFORMATION UNDER THE
CAPTION "RISK FACTORS" THEREIN.
The trading prices of the STRYPES in the secondary market will be affected
by the trading prices of the Snyder Common Stock in the secondary market. It
is impossible to predict whether the price of Snyder Common Stock will rise or
fall. Trading prices of Snyder Common Stock will be influenced by the
Company's operating results and prospects and by economic, financial and other
factors and market conditions that can affect the capital markets generally,
including the level of, and fluctuations in, the trading prices of stocks
generally and sales of substantial amounts of Snyder Common Stock in the
market subsequent to the offering of the STRYPES or the perception that such
sales could occur.
LIMITATIONS ON OPPORTUNITY FOR EQUITY APPRECIATION; POTENTIAL LOSSES
The opportunity for equity appreciation afforded by an investment in the
STRYPES is less than the opportunity for equity appreciation afforded by a
direct investment in the Snyder Common Stock because the amount receivable by
a Holder of a STRYPES on the Exchange Date will exceed the issue price of such
STRYPES only if the Exchange Price of the Snyder Common Stock exceeds the
Threshold Appreciation Price (which represents an appreciation of % over the
Initial Price). Moreover, each STRYPES will entitle the Holder to receive on
the Exchange Date only % (the percentage equal to the Initial Price divided
by the Threshold Appreciation Price) of any appreciation of the value of
Snyder Common Stock above the Threshold Appreciation Price. See "Investment
Objective and Policies--The Contract." Because the price of the Snyder Common
Stock is subject to market fluctuations, the value of the Snyder Common Stock
(or, pursuant to the right of the Contracting Stockholder, the amount of cash)
received by the Trust on the Business day immediately preceding the Exchange
Date, determined as described herein, may be more or less than the issue price
paid for the STRYPES.
NO STOCKHOLDER RIGHTS
Holders of the STRYPES will not be entitled to any rights with respect to
the Snyder Common Stock (including, without limitation, voting rights and
rights to receive any dividends or other distributions in respect thereof)
until such time, if any, as the Trust shall have delivered the Snyder Common
Stock in exchange for STRYPES on the Exchange Date or upon earlier dissolution
of the Trust, and unless the applicable record date, if any, for the exercise
of such right occurs after such delivery. For example, in the event that an
amendment is proposed to the Certificate of Incorporation or By-Laws of the
Company and the record date for determining the stockholders of record
entitled to vote on such amendment occurs prior to such delivery, Holders of
the STRYPES will not be entitled to vote on such amendment.
The Contracting Stockholder is not responsible for the determination or
calculation of the amount receivable by Holders of the STRYPES on the Exchange
Date or upon earlier dissolution of the Trust. The Contract between the Trust
and the Contracting Stockholder is a commercial transaction and does not
create any rights in, or for the benefit of, any third party, including any
Holder of STRYPES.
RISK RELATING TO BANKRUPTCY OF CONTRACTING STOCKHOLDER
The Trust believes that the Contract will constitute a "securities contract"
for purposes of the Bankruptcy Code, performance of which would not under
Section 555 of the Bankruptcy Code be subject to the automatic stay provisions
of the Bankruptcy Code in the event of bankruptcy of the Contracting
Stockholder. It is, however,
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<PAGE>
possible that the Contract will be determined not to qualify as a "securities
contract" or other protected transaction under Sections 556 and 560 of the
Bankruptcy Code for this purpose (or that there will be a delay while the
bankruptcy court considers such issue), in which case the bankruptcy of the
Contracting Stockholder may cause a delay in settlement of the Contract with
the Contracting Stockholder, or otherwise subject the Contract to the
bankruptcy proceedings, which could adversely affect the time of exchange or,
as a result, the amount received by the Holders in respect of the STRYPES.
ACCELERATION UPON TAX EVENT
On August 5, 1997, the Taxpayer Relief Act of 1997 (the "Tax Act") was
enacted into law. The Tax Act adds new Section 1259 to the Internal Revenue
Code of 1986, as amended (the "Code"). In general, Section 1259 of the Code
requires taxpayers (including corporations) to recognize gain (but not loss)
upon entering into a "constructive sale" of any appreciated position in stock.
For these purposes, a taxpayer is treated as making a "constructive sale" of
an appreciated position in stock when the taxpayer (or a person related to the
taxpayer) enters into a forward contract to deliver the stock. A "forward
contract" is defined for these purposes as a contract to deliver a
substantially fixed amount of property for a substantially fixed price.
Section 1259 of the Code generally applies to constructive sales entered into
after June 8, 1997. The Contracting Stockholder does not believe that it will
be considered to have made a constructive sale of any of its Snyder Common
Stock as a result of having entered into the Contract. There can be no
assurance, however, that future guidance will not be issued under Section 1259
of the Code which would indicate that the Contracting Stockholder has made a
constructive sale of its shares of Snyder Common Stock as a result of having
entered into the Contract. If future guidance is issued indicating that the
Contracting Stockholder has made a constructive sale of its Snyder Common
Stock as a result of having entered into the Contract, such guidance could
result in a Tax Event. It cannot be predicted whether or not any future
guidance will be issued under Section 1259 of the Code which could give rise
to a Tax Event, nor can it be predicted whether the Contracting Stockholder
will elect to cause a Tax Event by delivering the Tax Event Opinion to the
Trust in the event that future guidance is issued under Section 1259 of the
Code which could give rise to a Tax Event.
TAX MATTERS
Holders will experience a taxable event upon the exchange of STRYPES to the
extent that the Contracting Stockholder satisfies its obligation under the
Contract in whole or in part with cash (including upon the occurrence of a Tax
Event or a Reorganization Event). Because of an absence of authority as to the
proper character of any gain or loss resulting from such a taxable event, the
ultimate tax consequences to Holders as a result of the Contracting
Stockholder satisfying its obligation under the Contract, in whole or in part,
with cash is uncertain. Accordingly, prospective investors in the STRYPES
should consult their own tax advisers in this regard. Investors should also
consult their own tax advisers concerning the proper treatment of their pro
rata share of the Trust's fees and expenses, and the application of the United
States Federal income tax laws to their particular situations as well as any
consequences of the purchase, ownership and disposition of the STRYPES arising
under the laws of any other taxing jurisdiction. The tax consequences of
investing in the STRYPES are described in greater detail under "Certain United
States Federal Income Tax Considerations."
DESCRIPTION OF THE STRYPES
Each STRYPES represents a proportionate share of beneficial interest in the
Trust, and a total of 4,000,000 STRYPES will be issued in the Offering,
assuming no exercise of the Underwriters' over-allotment option. Upon
liquidation of the Trust, Holders are entitled to share pro rata in the net
assets of the Trust available for distribution. STRYPES have no preemptive,
redemption or conversion rights. The STRYPES, when issued and outstanding,
will be fully paid and nonassessable.
Holders are entitled to one vote for each STRYPES held on all matters to be
voted on by Holders and are not able to cumulate their votes in the election
of Trustees. The Trust intends to hold annual meetings as required
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<PAGE>
by the rules of the NYSE. The Holders have the right, upon the declaration in
writing or vote of more than two-thirds of the outstanding STRYPES, to remove
a Trustee. The Trustees will call a meeting of Holders to vote on the removal
of a Trustee upon the written request of the record Holders of 10% of the
STRYPES or to vote on other matters upon the written request of the record
Holders of 51% of the STRYPES (unless substantially the same matter was voted
on during the preceding 12 months).
BOOK-ENTRY SYSTEM
The STRYPES will be issued in the form of one or more global securities (the
"Global Securities") deposited with the Depositary and registered in the name
of a nominee of the Depositary.
The Depositary has advised the Trust and the Underwriters as follows: The
Depositary is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to Section 17A of the Exchange Act. The
Depositary was created to hold securities of persons who have accounts with
the Depositary ("participants") and to facilitate the clearance and settlement
of securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of certificates. Such participants
include securities brokers and dealers, banks, trust companies and clearing
corporations. Indirect access to the Depositary's book-entry system is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly.
Upon the issuance of a Global Security, the Depositary or its nominee will
credit the respective STRYPES represented by such Global Security to the
accounts of participants. The accounts to be credited shall be designated by
the Underwriters. Ownership of beneficial interests in such Global Securities
will be limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests by participants in such Global
Securities will be shown on, and the transfer of those ownership interests
will be effected only through, records maintained by the Depositary or its
nominee for such Global Securities. Ownership of beneficial interests in such
Global Securities by persons that hold through participants will be shown on,
and the transfer of that ownership interest within such participant will be
effected only through, records maintained by such participant. The laws of
some jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the STRYPES.
Except as set forth below, owners of beneficial interests in such Global
Securities will not be entitled to have the STRYPES registered in their names
and will not receive or be entitled to receive physical delivery of the
STRYPES in definitive form and will not be considered the owners or Holders
thereof.
Payment of shares of Snyder Common Stock or amounts payable or other
consideration deliverable on exchange of, and any quarterly distributions on,
STRYPES registered in the name of or held by the Depositary or its nominee
will be made to the Depositary or its nominee, as the case may be, as the
registered owner or the holder of the Global Security. None of the Trust, any
Trustee, the Administrator, the Paying Agent or the Custodian for the STRYPES
will have any responsibility or liability for any aspect of the records
relating to, or payments made on account of, beneficial ownership interests in
a Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Trust expects that the Depositary, upon receipt of any payment in
respect of a Global Security, will credit immediately participants' accounts
with payments in amounts proportionate to their respective beneficial
interests in such Global Security as shown on the records of the Depositary.
The Trust also expects that payments by participants to owners of beneficial
interests in such Global Security held through such participants will be
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governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers registered in "street
name," and will be the responsibility of such participants.
A Global Security may not be transferred except as a whole by the Depositary
to a nominee or a successor of the Depositary. If the Depositary is at any
time unwilling or unable to continue as depositary and a successor depositary
is not appointed by the Trust within ninety days, the Trust will issue STRYPES
in definitive registered form in exchange for the Global Security representing
such STRYPES. In addition, the Trust may at any time and in its sole
discretion determine not to have any STRYPES represented by one or more Global
Securities and, in such extent, will issue STRYPES in definitive form in
exchange for all of the Global Securities representing the STRYPES. Further,
if the Trust so specifies with respect to the STRYPES, an owner of a
beneficial interest in a Global Security representing STRYPES may, on terms
acceptable to the Trust and the Depositary for such Global Security, receive
STRYPES in definitive form. In any such instance, an owner of a beneficial
interest in a Global Security will be entitled to physical delivery in
definitive form of STRYPES represented by such Global Security equal in number
to that represented by such beneficial interest and to have such STRYPES
registered in its name.
TRUSTEES
The Trustees of the Trust consist of three individuals, none of whom is an
"interested person" of the Trust as defined in the Investment Company Act. The
Trustees of the Trust are responsible for the overall supervision of the
operations of the Trust and perform the various duties imposed on the trustees
of management investment companies by the Investment Company Act.
The Trustees of the Trust are:
<TABLE>
<CAPTION>
NAME, AGE AND ADDRESS TITLE PRINCIPAL OCCUPATION DURING PAST FIVE YEARS
--------------------- ---------------- ---------------------------------------------
<S> <C> <C>
Donald J. Puglisi, 50... Managing Trustee Professor of Finance University of Delaware
Department of Finance
University of Delaware
Newark, DE 19716
William R. Latham III,
51..................... Trustee Professor of Economics University of Delaware
Department of Economics
University of Delaware
Newark, DE 19716
James B. O'Neill, 57.... Trustee Professor of Economics University of Delaware
Center for Economics
Education &
Entrepreneurship
University of Delaware
Newark, DE 19716
</TABLE>
COMPENSATION OF TRUSTEES
Each unaffiliated Trustee will be paid by the Contracting Stockholder, in
respect of its annual fees and anticipated out-of-pocket expenses, a one-time,
up-front fee of $10,800. The Trust's Managing Trustee will also receive an
additional up-front fee of $3,600 for serving in that capacity. The Trustees
will not receive, either directly or indirectly, any compensation, including
any pension or retirement benefits, from the Trust. None of the Trustees
receives any compensation for serving as a trustee or director of any other
affiliated investment company.
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MANAGEMENT ARRANGEMENTS
PORTFOLIO MANAGEMENT AND ADMINISTRATION
The Trust will be internally managed and will not have an investment
adviser. The Trust's portfolio will not be actively managed. The Trustees of
the Trust will authorize the purchase of the Contract and the U.S. Treasury
Securities as directed by the Declaration of Trust. It is a fundamental policy
of the Trust that the Contract may not be disposed of during the term of the
Trust and that, unless the Trust dissolves prior to the Exchange Date due to
the occurrence of a Reorganization Event, in the event that the Contracting
Stockholder exercises its option to accelerate the contract upon the
occurrence of a Tax Event or in the event of a Default by the Contracting
Stockholder, the U.S. Treasury Securities may not be disposed of prior to
their respective maturities.
The Contracting Stockholder will pay all expenses incurred in the operation
of the Trust, including, among other things, accounting services, expenses for
legal and auditing services, taxes, costs of printing proxies, listing fees,
if any, stock certificates and shareholder reports, charges of the
Administrator, the Custodian and the Paying Agent, expenses of registering the
STRYPES under Federal and state securities laws, Commission fees, fees and
expenses of Trustees, accounting costs, brokerage costs, litigation and other
extraordinary or non-recurring expenses, mailing and other expenses properly
payable by the Trust. See "--Estimated Expenses."
ADMINISTRATOR
The day-to-day affairs of the Trust will be managed by The Bank of New York,
as trust administrator pursuant to an Administration Agreement. Under the
Administration Agreement, the Trustees have delegated most of their
operational duties to the Administrator, including without limitation, the
duties to: (i) pay, or cause to be paid, all expenses incurred by the Trust;
(ii) with the approval of the Trustees, engage legal and other professional
advisors (other than the independent public accountants for the Trust); (iii)
instruct the Paying Agent to pay distributions on STRYPES as described herein;
(iv) cause the legal and other professional advisors engaged by it to prepare
and mail, file or publish all notices, proxies, reports, tax returns and other
communications and documents for the Trust, and keep all books and records for
the Trust; (v) at the direction of the Trustees, and upon being furnished with
reasonable security and indemnity as the Administrator may require, institute
and prosecute legal and other appropriate proceedings to enforce the rights
and remedies of the Trust; and (vi) make, or cause to be made, all necessary
arrangements with respect to meetings of Trustees and any meetings of holders
of STRYPES. The Administrator will not, however, select the independent public
accountants for the Trust or sell or otherwise dispose of the Trust assets
(except in connection with an acceleration of the Contract as described under
"Investment Objective and Policies--The Contract--Reorganization Event Causing
a Termination of the Trust," "--Acceleration Upon Tax Event" and "--Collateral
Arrangements; Acceleration," or the settlement of the Contract on the Business
Day immediately preceding the Exchange Date).
The Administration Agreement may be terminated by either the Trust or the
Administrator upon 60 days prior written notice, except that no termination
shall become effective until a successor Administrator has been chosen and has
accepted the duties of the Administrator.
Except for its roles as Administrator, Custodian and Paying Agent of the
Trust, and except for its role as Collateral Agent under the Security and
Pledge Agreement, The Bank of New York has no other affiliation with, and is
not engaged in any other transactions with, the Trust.
The address of the Administrator is 101 Barclay Street, New York, New York
10286.
CUSTODIAN
The Trust's custodian is The Bank of New York pursuant to a custodian
agreement (the "Custodian Agreement"). In the event of any termination of the
Custodian Agreement by the Trust or the resignation of the
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<PAGE>
Custodian, the Trust must engage a new Custodian to carry out the duties of the
Custodian as set forth in the Custodian Agreement. The Custodian will also act
as Collateral Agent under the Security and Pledge Agreement and will hold a
perfected security interest in the Snyder Common Stock or other assets
consistent with the terms of the Contract pledged thereunder.
PAYING AGENT
The paying agent, transfer agent and registrar for the STRYPES is The Bank of
New York pursuant to a paying agent agreement (the "Paying Agent Agreement").
In the event of any termination of the Paying Agent Agreement by the Trust or
the resignation of the Paying Agent, the Trust will use its best efforts to
engage a new Paying Agent to carry out the duties of the Paying Agent.
INDEMNIFICATION
The Trust will indemnify each Trustee, the Administrator, the Paying Agent
and the Custodian with respect to any claim, liability, loss which it may incur
in acting as Trustee, Administrator, Paying Agent or Custodian, as the case may
be, and any reasonable expense incurred in connection with any such claim,
liability or loss (including the reasonable costs and expenses of the defense
against any claim or liability) except in the case of willful misfeasance, bad
faith, gross negligence or reckless disregard of their respective duties.
Subject to the satisfaction of certain conditions, Merrill Lynch & Co., Inc.
will reimburse the Trust for any amounts it may be required to pay as
indemnification to any Trustee, the Administrator, the Paying Agent or the
Custodian, and Merrill Lynch & Co., Inc. will in turn be reimbursed by the
Contracting Stockholder for all such reimbursements paid by it.
ESTIMATED EXPENSES
At the closing of the Offering, the Contracting Stockholder will pay to each
of the Administrator, the Custodian and the Paying Agent a one-time, up-front
amount in respect of its fee and, in the case of the Administrator, certain
anticipated ongoing expenses of the Trust over the term of the Trust. The
anticipated Trust expenses to be borne by the Contracting Stockholder include,
among other things, expenses for legal and independent accountants' services,
costs of printing proxies, STRYPES certificates and Holder reports and stock
exchange fees. Organization costs of the Trust in the amount of $ and
estimated costs of the Trust in connection with the initial registration and
public offering of the STRYPES in the amount of approximately $ will be paid
by the Contracting Stockholder.
The amount payable to the Administrator in respect of the anticipated ongoing
expenses of the Trust was determined based on expense estimates made in good
faith on the basis of information currently available to the Trust, including
estimates furnished by the Trust's agents. Merrill Lynch & Co., Inc. will pay
any unanticipated operating expenses of the Trust. Merrill Lynch & Co., Inc.
will be reimbursed by the Contracting Stockholder for all fees and expenses of
the Trust paid by it.
DIVIDENDS AND DISTRIBUTIONS
The Trust intends to distribute to Holders on a quarterly basis the proceeds
of the U.S. Treasury Securities held by the Trust. The first distribution, in
respect of the period from , 1997 until , 1997, will be made on
, 1997 to Holders of record as of , 1997, and will equal $ per
STRYPES. Thereafter, distributions will be made on , , and of
each year to Holders of record as of each , , and , respectively.
Upon dissolution of the Trust as described in "Investment Objective and
Policies--Trust Dissolution" each Holder will share pro rata in any remaining
net assets of the Trust.
NET ASSET VALUE
The net asset value of the STRYPES will be calculated by the Trust no less
frequently than quarterly by dividing the value of the net assets of the Trust
(the value of its assets less its liabilities) by the total number of
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<PAGE>
STRYPES outstanding. The Trust's net asset value will be published semi-
annually as part of the Trust's semi-annual report to Holders and at such other
times as the Trustees may determine. The U.S. Treasury Securities held by the
Trust will be valued at the mean between the last current bid and asked prices
or, if quotations are not available, as determined in good faith by the Trust.
Short-term investments having a maturity of 60 days or less are valued at cost
with accrued interest or discount earned included in interest receivable. The
Contract will be valued at the mean of the bid prices received by the
Administrator from at least three independent broker-dealer firms unaffiliated
with the Trust who are in the business of making bids on financial instruments
similar to the Contract and with terms comparable thereto.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
Set forth in full below is the opinion of Brown & Wood llp, counsel to the
Trust, as to certain United States Federal income tax consequences of the
purchase, ownership and disposition of the STRYPES. Such opinion is based upon
laws, regulations, rulings and decisions now in effect, all of which are
subject to change (including retroactive changes in effective dates) or
possible differing interpretations. The discussion below deals only with
STRYPES held as capital assets and does not purport to deal with persons in
special tax situations, such as financial institutions, insurance companies,
regulated investment companies, dealers in securities or currencies, tax-exempt
entities, or persons holding STRYPES as a hedge against currency risks, as a
position in a "straddle" or as part of a "hedging" or "conversion" transaction
for tax purposes. It also does not deal with Holders of STRYPES other than
original purchasers thereof (except where otherwise specifically noted herein).
Moreover, the discussion below generally does not address the tax consequences
of ownership of the Snyder Common Stock or Marketable Securities. The following
discussion also does not address the tax consequences of investing in the
STRYPES arising under the laws of any state, local or foreign jurisdiction.
Persons considering the purchase of the STRYPES should consult their own tax
advisors concerning the application of the United States Federal income tax
laws to their particular situations as well as any consequences of the
purchase, ownership and disposition of the STRYPES arising under the laws of
any other taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of STRYPES
that is for United States Federal income tax purposes (i) a citizen or resident
of the United States, (ii) a corporation, a partnership or other entity created
or organized in or under the laws of the United States or of any political
subdivision thereof, (iii) an estate the income of which is subject to United
States Federal income taxation regardless of its source, or (iv) a trust if a
court within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust. As used herein,
the term "non-U.S. Holder" means a beneficial owner of STRYPES that is not a
U.S. Holder. Unless otherwise specifically provided, the following opinion of
Brown & Wood llp assumes that on the Exchange Date Holders of the STRYPES will
receive shares of Snyder Common Stock.
CLASSIFICATION OF THE TRUST
The Trust will be classified as a grantor trust under subpart E, Part I of
subchapter J of the Internal Revenue Code of 1986, as amended (the "Code"). As
such, Holders of the STRYPES will be treated for United States Federal income
tax purposes as owners of a pro rata undivided interest in the Trust's assets
which will consist of the U.S. Treasury Securities and the Contract.
Accordingly, each Holder will be required to report on its United States
Federal income tax return its pro rata share of the entire income on the
Trust's assets in accordance with such Holder's regular method of tax
accounting.
U.S. HOLDERS
As previously discussed, each U.S. Holder will be considered the owner of its
pro rata portion of the U.S. Treasury Securities and the Contract held by the
Trust. The cost to a U.S. Holder of its STRYPES will be allocated among such
U.S. Holder's pro rata portion of the U.S. Treasury Securities and the Contract
(in proportion to the relative fair market values thereof on the date on which
the U.S. Holder acquires its STRYPES)
29
<PAGE>
in order to determine the U.S. Holder's initial tax basis in the U.S. Holder's
pro rata portion of the U.S. Treasury Securities and the Contract. It is
currently anticipated that % and % of the net proceeds of the offering will
be used by the Trust to purchase the U.S. Treasury Securities and as payments
under the Contract, respectively.
The U.S. Treasury Securities held by the Trust will be treated for United
States Federal income tax purposes as having original issue discount which will
accrue over the term of the U.S. Treasury Securities. In general, a U.S. Holder
will be treated as having purchased each U.S. Treasury Security held by the
Trust with original issue discount in an amount equal to the excess of the U.S.
Holder's pro rata portion of the amount payable on such U.S. Treasury Security
over the Holder's initial tax basis therefor as discussed above. A U.S. Holder
(whether on the cash or accrual method of tax accounting) will be required to
include such original issue discount in income for United States Federal income
tax purposes as it accrues in accordance with a constant yield method. Because
it is expected that 20% or more of the Holders of STRYPES will be accrual basis
taxpayers, original issue discount on any short-term U.S. Treasury Securities
(i.e., any U.S. Treasury Security with a maturity of one year or less from the
date it is purchased by the Trust) held by the Trust will also be currently
includable in income by U.S. Holders as it accrues on a straight-line basis
(unless a U.S. Holder elects to accrue such original issue discount on a
constant yield basis). A U.S. Holder's tax basis in its pro rata portion of a
U.S. Treasury Security will be increased by the amount of any original issue
discount included in income by the U.S. Holder with respect to such U.S.
Treasury Security (as described above).
Each U.S. Holder will also be treated as having entered into a pro rata
portion of the Contract. Under current law, a U.S. Holder should not be
required to recognize any income, gain or loss with respect to the Contract
until the earlier of the Exchange Date, a Tax Event Acceleration Date or upon a
Reorganization Event. On the Exchange Date or a Tax Event Acceleration Date, if
the Contracting Stockholder delivers Snyder Common Stock pursuant to the
Contract in respect of a U.S. Holder's STRYPES, the U.S. Holder will generally
not realize any taxable gain or loss upon the receipt of such Snyder Common
Stock. However, a U.S. Holder will generally be required to recognize taxable
gain or loss with respect to any cash received in lieu of fractional shares.
The amount of such gain or loss recognized by a U.S. Holder will be equal to
the difference, if any, between the amount of cash received by the U.S. Holder
and the portion of the U.S. Holder's tax basis in the Contract that is
allocable to the fractional shares. Any such taxable gain or loss will be
treated as short-term capital gain or loss. A U.S. Holder will have an initial
tax basis in any Snyder Common Stock received thereby on the Exchange Date or a
Tax Event Acceleration Date in an amount equal to the U.S. Holder's tax basis
in the Contract less the portion of such tax basis that is allocable to any
fractional shares (as described above) and will realize taxable gain or loss
with respect to any such Snyder Common Stock received thereby on the Exchange
Date or a Tax Event Acceleration Date only upon the subsequent sale or
disposition by the U.S. Holder of such Snyder Common Stock. In addition, a U.S.
Holder's holding period for any Snyder Common Stock received by such U.S.
Holder on the Exchange Date or a Tax Event Acceleration Date will begin on the
Exchange Date or the day immediately following the Tax Event Acceleration Date,
respectively, and will not include the period during which the U.S. Holder held
the related STRYPES.
Alternatively, if the Contracting Stockholder satisfies the Contract in cash
on the Exchange Date or a Tax Event Acceleration Date in respect of a U.S.
Holder's STRYPES, the U.S. Holder will recognize taxable gain or loss on the
day immediately preceding the Exchange Date or the Tax Event Acceleration Date,
respectively, with respect to the Contract in an amount equal to the
difference, if any, between the total amount of cash representing shares of
Snyder Common Stock received by such U.S. Holder in respect of Snyder Common
Stock and an amount equal to the U.S. Holder's tax basis in the Contract. It is
uncertain whether such gain or loss would be treated as capital or ordinary. If
such gain or loss is properly treated as capital, then such gain or loss will
be treated as long-term capital gain or loss if the STRYPES has been held by
the U.S. Holder for more than one year as of the day immediately preceding the
Exchange Date or the Tax Event Acceleration Date, respectively. If such gain or
loss is properly treated as ordinary gain or loss, it is possible that the
deductibility of any loss by a U.S. Holder who is an individual could be
subject to the limitations applicable to miscellaneous itemized deductions
provided for under Section 67(a) of the Code. In general, Section 67(a) of the
Code provides that an individual may only deduct miscellaneous itemized
deductions for a particular taxable year to the extent that the
30
<PAGE>
aggregate amount of the individual's miscellaneous itemized deductions for such
taxable year exceed two percent of the individual's adjusted gross income for
such taxable year (the miscellaneous itemized deductions and other itemized
deductions allowable to high-income individuals, however, are generally subject
to further limitations under Section 68 of the Code). Prospective investors in
the STRYPES who are individuals should also be aware that miscellaneous
itemized deductions are not allowable in computing the United States Federal
alternative minimum tax imposed by Section 55 of the Code. Moreover, the proper
treatment of any cash received by a U.S. Holder upon the occurrence of a Tax
Event (other than cash representing shares of Snyder Common Stock) is
uncertain. It is likely that a U.S. Holder should be required to recognize gain
in an amount equal to such cash, but it is uncertain whether such gain should
be treated as capital gain or ordinary income. Prospective investors in the
STRYPES are urged to consult their own tax advisors concerning the character of
any gain or loss realized on the Exchange Date or on a Tax Event Acceleration
Date with respect to the Contract in the event that the Contracting Stockholder
elects to satisfy its obligations under the Contract in cash on the Exchange
Date or upon the occurrence of a Tax Event, as well as the deductibility of any
such loss.
Upon the sale or other disposition of a STRYPES prior to the Exchange Date, a
U.S. Holder generally will be required to allocate the total amount realized by
such U.S. Holder upon such sale or other disposition between the U.S. Holder's
pro rata portion of the U.S. Treasury Securities and the Contract based upon
their relative fair market values (as determined on the date of disposition). A
U.S. Holder will generally be required to recognize taxable gain or loss with
respect to each such component (i.e., the U.S. Holder's pro rata portion of the
U.S. Treasury Securities and the Contract) in an amount equal to the
difference, if any, between the amount realized with respect to each such
component upon the sale or disposition of the STRYPES (as determined in the
manner described above) and the U.S. Holder's adjusted tax basis in each such
component. Any such gain or loss will generally be treated as long-term capital
gain or loss if the U.S. Holder has held the STRYPES for more than one year at
the time of disposition.
The proper treatment of the payment by the Contracting Stockholder or Merrill
Lynch & Co., Inc. of various costs and expenses associated with the
organization and operation of the Trust is uncertain. It is possible that there
will be no United States Federal income tax consequences to U.S. Holders as a
result of any such payments. However, it is possible that the Internal Revenue
Service ("IRS") could assert that any such payments constitute income to U.S.
Holders. If the IRS were to prevail in treating such payments as income, then
an individual U.S. Holder who itemizes deductions could possibly amortize and
deduct over the term of the Trust (subject to any applicable limitation such as
Section 67(a) of the Code) its pro rata portion of the one-time, up-front fees
paid to the Administrator, the Custodian and the Paying Agent, and could
possibly deduct (subject to any applicable limitations such as those in Section
67(a) of the Code) its pro rata portion of the other expenses described under
"Management Arrangements--Estimated Expenses" incurred by the Trust resulting
from its ongoing operations (including the fees payable to the Trustees) as
such expenses are incurred. Brown & Wood llp, counsel to the Trust, believes
that a U.S. Holder's pro rata portion of the expenses directly incurred by a
U.S. Holder in connection with the organization of the Trust, underwriting
discounts and commissions and other offering expenses should be includable in
the cost to the U.S. Holder of the STRYPES. However, there can be no assurance
that the IRS will not take a contrary view. If the IRS were to prevail in
treating such expenses as excludible from a U.S. Holder's cost of the STRYPES,
such expenses would not be includable in the basis of the assets of the Trust
and should instead, subject to the limitations provided for under Section 67(a)
of the Code, be amortizable and deductible over the term of the Trust.
POSSIBLE ALTERNATIVE CHARACTERIZATIONS OF THE CONTRACT
Brown & Wood llp, counsel to the Trust, believes the Contract should be
treated for United States Federal income tax purposes as a prepaid forward
contract for the purchase of a variable number of shares of Snyder Common
Stock. The IRS could conceivably take the view that the Contract should be
treated as a loan to the Contracting Stockholder in exchange for a contingent
debt obligation of the Contracting Stockholder. If the IRS were to prevail in
making such an assertion, a U.S. Holder might be required to include original
issue discount in income over the term of the STRYPES based on the excess of
the anticipated value of the Snyder Common
31
<PAGE>
Stock to be received in respect of the Contract over the amount paid for the
Contract. In addition, a U.S. Holder would be required to include interest
(rather than capital gain) in income on the Exchange Date in an amount equal to
the excess, if any, of the value of the Snyder Common Stock received on the
Exchange Date (or the proceeds from prior disposition of the Contract) over the
aggregate of the basis of the Contract and any interest on the Contract
previously included in income (or might be entitled to an ordinary deduction to
the extent of interest previously included in income and not ultimately
received). The IRS could also conceivably take the view that a U.S. Holder
should simply include in income as interest the amount of cash actually
received each year in respect of the STRYPES.
MISCELLANEOUS TAX MATTERS
Special tax rules may apply to persons holding STRYPES as part of a
"synthetic security" or other integrated investment, or as part of a straddle,
hedging transaction or other combination of offsetting positions. For instance,
Section 1258 of the Code may possibly require certain U.S. Holders of the
STRYPES who enter into hedging transactions or offsetting positions with
respect to the STRYPES to treat all or a portion of any gain realized on the
STRYPES as ordinary income in instances where such gain may have otherwise been
treated as capital gain. U.S. Holders hedging their positions with respect to
the STRYPES or otherwise holding their STRYPES in a manner described above
should consult their own tax advisors regarding the applicability of Section
1258 of the Code, or any other provision of the Code, to their investment in
the STRYPES.
If as a result of a Reorganization Event, cash, Marketable Securities, or a
combination of cash and Marketable Securities is delivered pursuant to the
Contract, U.S. Holders generally will be required to recognize taxable gain or
loss in respect of any cash received, including cash received in lieu of
fractional shares of Marketable Securities and, in some instances, in respect
of any Marketable Securities received upon receipt thereof. Moreover, in some
instances, U.S. Holders may be required to recognize at the time of a
Reorganization Event taxable gain or loss in respect of the amount of cash
(and, in some cases, Marketable Securities) which is fixed at the time of such
Reorganization Event and is to be delivered pursuant to the Contract. It is
uncertain whether any taxable gain or loss recognized by a U.S. Holder as a
result of a Reorganization Event would be capital or ordinary. U.S. Holders are
urged to consult their own tax advisors concerning the specific tax
consequences of a Reorganization Event on their investment in a STRYPES.
THE TAXPAYER RELIEF ACT OF 1997
On August 5, 1997, the Taxpayer Relief Act of 1997 (the "Tax Act") was
enacted into law. The Tax Act adds new Section 1259 to the Code. In general,
Section 1259 of the Code requires taxpayers (including corporations) to
recognize gain (but not loss) upon entering into a "constructive sale" of any
appreciated position in stock. For these purposes, a taxpayer is treated as
making a "constructive sale" of an appreciated position in stock when the
taxpayer (or a person related to the taxpayer) enters into a forward contract
to deliver the stock. A "forward contract" is defined for these purposes as a
contract to deliver a substantially fixed amount of property for a
substantially fixed price. Section 1259 of the Code generally applies to
constructive sales entered into after June 8, 1997. The Contracting Stockholder
does not believe that it will be considered to have made a constructive sale of
any of its Snyder Common Stock as a result of having entered into the Contract.
There can be no assurance, however, that future guidance will not be issued
under Section 1259 of the Code which would indicate that the Contracting
Stockholder has made a constructive sale of its shares of Snyder Common Stock
as a result of having entered into the Contract. If future guidance is issued
indicating that the Contracting Stockholder has made a constructive sale of its
Snyder Common Stock as a result of having entered into the Contract, such
guidance could result in a Tax Event. It cannot be predicted whether or not any
future guidance will be issued under Section 1259 of the Code which could give
rise to a Tax Event, nor can it be predicted whether the Contracting
Stockholder will elect to cause a Tax Event by delivering the Tax Event Opinion
to the Trust in the event that future guidance is issued under Section 1259 of
the Code which could give rise to a Tax Event.
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<PAGE>
The Tax Act also reduces the maximum rates on long-term capital gains
recognized on capital assets held by individual taxpayers for more than
eighteen months as of the date of disposition (and would further reduce the
maximum rates on such gains in the year 2001 and thereafter for certain
individual taxpayers who meet specified conditions). Prospective investors
should consult their own tax advisors concerning these tax law changes.
NON-U.S. HOLDERS
Subject to the discussion below concerning income that is effectively
connected with a trade or business conducted by a non-U.S. Holder in the United
States, payments of interest (including original issue discount) made with
respect to the U.S. Treasury Securities will not be subject to United States
withholding tax, provided that such non-U.S. Holder complies with applicable
certification requirements. In general, for a non-U.S. Holder to qualify for
this exemption from taxation, the last United States payor in the chain of
payment prior to payment to a non-U.S. Holder (the "Withholding Agent") must
have received in the year in which a payment of interest or principal occurs,
or in either of the two preceding calendar years, a statement that (i) is
signed by the beneficial owner of the U.S. Treasury Securities under penalties
of perjury, (ii) certifies that such owner is not a U.S. Holder and (iii)
provides the name and address of the beneficial owner. The statement may be
made on an IRS Form W-8 or a substantially similar form, and the beneficial
owner must inform the Withholding Agent of any change in the information on the
statement within 30 days of such change. If STRYPES is held through a
securities clearing organization or certain other financial institutions, the
organization or institution may provide a signed statement to the Withholding
Agent. However, in such case, the signed statement must be accompanied by a
copy of the IRS Form W-8 or the substitute form provided by the beneficial
owner to the organization or institution.
Any capital gain realized in respect of STRYPES by a non-U.S. Holder will
generally not be subject to United States Federal income tax if (i) such gain
is not effectively connected with a United States trade or business of such
non-U.S. Holder and (ii) in the case of an individual non-U.S. Holder, such
individual is not present in the United States for 183 days or more in the
taxable year of the sale or other disposition, or the gain is not attributable
to a fixed place of business maintained by such individual in the United States
and such individual does not have a "tax home" (as defined for United States
Federal income tax purposes) in the United States.
If any interest or gain realized by a non-U.S. Holder is effectively
connected with the non-U.S. Holder's conduct of a trade or business in the
United States, such interest or gain will be subject to regular United States
Federal income tax in the same manner as if the non-U.S. Holder were a U.S.
Holder. In addition, in such event, if such non-U.S. Holder is a foreign
corporation, such interest or gain may be included in the earnings and profits
of such non-U.S. Holder in determining such non-U.S. Holder's United States
branch profits tax liability.
BACKUP WITHHOLDING AND INFORMATION REPORTING
A beneficial owner of STRYPES may be subject to information reporting and to
backup withholding at a rate of 31 percent of certain amounts paid to the
beneficial owner unless such beneficial owner provides proof of an applicable
exemption or a correct taxpayer identification number, and otherwise complies
with applicable requirements of the backup withholding rules.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.
PROSPECTIVE INVESTORS IN THE STRYPES SHOULD BE AWARE THAT THERE IS NO
AUTHORITY DIRECTLY ADDRESSING THE PROPER UNITED STATES FEDERAL INCOME TAX
TREATMENT OF THE STRYPES OR SECURITIES WITH TERMS SUBSTANTIALLY THE SAME AS THE
STRYPES, AND THAT NO RULING HAS BEEN REQUESTED FROM THE IRS WITH
33
<PAGE>
RESPECT TO THE STRYPES. ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THE IRS
WILL AGREE WITH THE FOREGOING DISCUSSION AND THAT THE IRS WILL NOT ASSERT A
CONTRARY POSITION AS TO THE PROPER UNITED STATES FEDERAL INCOME TAX TREATMENT
OF THE STRYPES WHICH MIGHT CAUSE THE CHARACTER AND TIMING OF INCOME, GAIN OR
LOSS RECOGNIZED WITH RESPECT TO A STRYPES TO DIFFER SIGNIFICANTLY FROM SUCH
CHARACTER AND TIMING DISCUSSED ABOVE. PROSPECTIVE INVESTORS IN THE STRYPES ARE
THEREFORE URGED TO CONSULT WITH THEIR OWN TAX ADVISERS PRIOR TO MAKING AN
INVESTMENT IN THE STRYPES.
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<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement"), the Trust has agreed to sell to each of the
underwriters named below (the "Underwriters"), and each of the Underwriters,
for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs &
Co., Montgomery Securities and Bear, Stearns & Co. Inc. are acting as
representatives (the "Representatives"), has severally agreed to purchase, the
aggregate number of STRYPES set forth opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER STRYPES
----------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................................
Goldman, Sachs & Co...............................................
Montgomery Securities.............................................
Bear, Stearns & Co. Inc. .........................................
---------
Total........................................................ 4,000,000
=========
</TABLE>
In the Purchase Agreement, the several Underwriters have agreed,
respectively, subject to the terms and conditions set forth in the Purchase
Agreement, to purchase all of the STRYPES being sold pursuant to the Purchase
Agreement if any of the STRYPES are purchased. In the event of a failure to
close, any funds debited from any investor's account maintained with an
Underwriter will be credited to such account and any funds received by such
Underwriter by check or money order from any investor will be returned to such
investor by check.
The Underwriters have each advised the Trust that they propose initially to
offer the STRYPES to the public at the public offering price set forth on the
cover page of this Prospectus. The Underwriters have also advised the Trust
that they propose to offer STRYPES to certain dealers at the initial public
offering price less a concession not in excess of $ per STRYPES. Such
Underwriters may allow, and such dealers may reallow, a discount not in excess
of $ per STRYPES to certain other dealers. After the initial public
offering, the public offering price, concession and discount may be changed.
The sales load of $ per STRYPES is equal to % of the initial public
offering price. Investors must pay for any STRYPES purchased in the initial
public offering on or before , 1997.
The Trust has granted the Underwriters an option, exercisable for 30 days
from the date of this Prospectus, to purchase up to an aggregate of 600,000
additional STRYPES (subject to decrease by the number of STRYPES resulting
from the split of the initial STRYPES described below) to cover over-
allotments, if any, at the initial public offering price less the sales load.
To the extent the Underwriters exercise such option, the Underwriters will
have a firm commitment, subject to certain conditions, to purchase a number of
additional STRYPES.
Prior to the Offering, there has been no public market for the STRYPES.
Application will be made to list the STRYPES on the NYSE.
The Company, the Contracting Stockholder, certain other stockholders of the
Company and the Company's directors and executive officers have agreed,
subject to certain exceptions for pledges and, in the case of the Company, the
grant and exercise of employee stock options and the issuance of shares in
connection with acquisitions as long as all executive officers, directors and
other affiliates of the entity being acquired have agreed in writing to the
restrictions set forth below, and the effecting of the transactions
contemplated by the Contract, not to, directly or indirectly, sell, offer to
sell, grant any option for the sale of, or otherwise dispose of, any capital
stock of the Company or any security convertible or exchangeable into, or
exercisable for, such capital stock, or, in the case of the Company, file any
registration statement with respect to any of the foregoing (other than a
registration statement on Form S-8 to register shares issuable upon exercise
of employee stock options or a registration statement on Form S-4 to register
shares issuable in connection with an acquisition), for a period of 90 days
after the date of this Prospectus, without the prior written consent of
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
The Company and the Contracting Stockholder and its members have agreed to
indemnify the Underwriters against certain liabilities, including liabilities
under the Securities Act, or to contribute to payments the Underwriters may be
required to make in respect thereof.
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<PAGE>
In connection with the formation of the Trust, ML IBK Positions, Inc., an
affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated, subscribed
for and purchased one STRYPES for a purchase price of $100. Prior to the
Offering, the initial STRYPES will be split into the smallest whole number of
STRYPES that would result in the per STRYPES amount recorded as capital, after
effecting the split, not exceeding the public offering price per STRYPES.
Under the Contract, the Contracting Stockholder will be obligated to deliver
to the Trust on the Business Day immediately preceding the Exchange Date a
number of shares of Snyder Common Stock (or, pursuant to the right of the
Contracting Stockholder, cash, or a combination of cash and Snyder Common
Stock, with an equal value) in respect of such STRYPES on the same terms as
the STRYPES offered hereby.
Until the distribution of the STRYPES is completed, rules of the Commission
may limit the ability of the Underwriters and any selling group members to bid
for and purchase the STRYPES or shares of the Snyder Common Stock. As an
exception to these rules, the Representatives are permitted to engage in
certain transactions that stabilize the price of the STRYPES or the Snyder
Common Stock. Such transactions consist of bids or purchases for the purpose
of pegging, fixing or maintaining the price of the STRYPES or the Snyder
Common Stock.
If the Underwriters create a short position in the STRYPES in connection
with the Offering, i.e., if they sell more STRYPES than are set forth on the
cover page of this Prospectus, the Representatives may reduce that short
position by purchasing STRYPES in the open market. The Representatives may
also elect to reduce any short position by exercising all or part of the over-
allotment option described above.
The Representatives may also impose a penalty bid on certain Underwriters
and selling group members. This means that if the Representatives purchase
STRYPES in the open market to reduce the Underwriters' short position or to
stabilize the price of the STRYPES, they may reclaim the amount of the selling
concession from the Underwriters and any selling group members who sold those
STRYPES as part of the Offering.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases. The imposition of a penalty
bid might also have an effect on the price of a security to the extent that it
were to discourage resales of the security.
Neither the Trust nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the STRYPES or the
Snyder Common Stock. In addition, neither the Trust nor any of the
Underwriters makes any representation that the Representatives will engage in
such transactions or that such transactions, once commenced, will not be
discontinued without notice.
Certain of the Underwriters render investment banking and other financial
services to the Company from time to time.
LEGAL MATTERS
Certain legal matters will be passed upon for the Trust by its counsel,
Brown & Wood llp, New York, New York. Certain matters of Delaware law will be
passed upon for the Trust by Richards, Layton & Finger, Wilmington, Delaware.
Debevoise & Plimpton, New York, New York, has acted as counsel for the
Underwriters with respect to certain legal matters in connection with the
Offering.
EXPERTS
The statement of assets, liabilities and capital included in this Prospectus
has been audited by , independent auditors, as stated in their opinion
appearing herein, and has been included in reliance upon such opinion given on
the authority of said firm as experts in auditing and accounting.
36
<PAGE>
ADDITIONAL INFORMATION
The Trust has filed with the Commission, Washington, D.C. 20549, a
Registration Statement on Form N-2 under the Securities Act with respect to
the STRYPES offered hereby. Further information concerning the STRYPES and the
Trust may be found in the Registration Statement, of which this Prospectus
constitutes a part. The Registration Statement may be inspected without charge
at the public reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and copies of all or any part
thereof may be obtained from such office after payment of the fees prescribed
by the Commission. The Commission maintains a Web site at http://www.sec.gov
containing reports, proxy and information statements and other information
regarding registrants, such as the Trust, that file electronically with the
Commission.
37
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholder of Snyder STRYPES Trust:
We have audited the accompanying statement of assets, liabilities and capital
of Snyder STRYPES Trust as of , 1997. This financial statement is the
responsibility of the Trust's management. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of assets, liabilities and
capital is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
assets, liabilities and capital. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit of the financial statement provides a reasonable basis for our
opinion.
In our opinion, the statement of assets, liabilities and capital referred to
above presents fairly, in all material respects, the financial position of
Snyder STRYPES Trust, as of , 1997, in conformity with generally accepted
accounting principles.
New York, New York
, 1997
38
<PAGE>
SNYDER STRYPES TRUST
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
, 1997
<TABLE>
<S> <C>
ASSETS
Cash..................................................................... $100
----
Total Assets........................................................... $100
====
LIABILITIES
Total Liabilities........................................................ $ 0
====
NET ASSETS............................................................... $100
====
CAPITAL
STRYPES, par value $.10 per STRYPES; 1 STRYPES issued and outstanding
(Note 3)................................................................ $100
====
</TABLE>
- --------
(1) The Trust was created as a Delaware business trust on August 5, 1997 and
has had no operations other than matters relating to its organization and
registration as a non-diversified, closed-end management investment
company under the Investment Company Act of 1940, as amended. Costs
incurred in connection with the organization of the Trust and ongoing
administrative expenses will be paid by the Contracting Stockholder.
(2) Offering expenses will be payable upon completion of the Offering and also
will be paid by the Contracting Stockholder.
(3) On , 1997, the Trust issued one STRYPES to ML IBK Positions, Inc.,
an affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated, in
consideration for a purchase price of $100.
The Declaration of Trust provides that prior to the Offering, the Trust will
split the outstanding STRYPES to be effected on the date that the price and
underwriting discount of the STRYPES being offered to the public is
determined, but prior to the sale of the STRYPES to the Underwriters. The
outstanding STRYPES will be split into the smallest whole number of STRYPES
that would result in the per STRYPES amount recorded as capital, after
effecting the split, not exceeding the public offering price per STRYPES.
39
<PAGE>
THE FOLLOWING PROSPECTUS OF SNYDER COMMUNICATIONS, INC. IS ATTACHED
AND DELIVERED FOR CONVENIENCE OF REFERENCE ONLY. THE PROSPECTUS OF
SNYDER COMMUNICATIONS, INC. DOES NOT CONSTITUTE A PART OF THE
FOREGOING PROSPECTUS OF SNYDER STRYPES TRUST, NOR IS IT INCORPORATED
BY REFERENCE THEREIN.
<PAGE>
[SNYDER PROSPECTUS]
<PAGE>
================================================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE TRUST OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURI-
TIES OTHER THAN THOSE SPECIFICALLY OFFERED HEREBY, OR OF ANY SECURITIES OF-
FERED HEREBY, IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
AN OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS
PROSPECTUS OR IN THE AFFAIRS OF THE TRUST SINCE THE DATE HEREOF OR SINCE THE
DATES AS OF WHICH INFORMATION IS SET FORTH HEREIN. IN THE EVENT THAT ANY SUCH
CHANGE SHALL OCCUR DURING THE PERIOD IN WHICH APPLICABLE LAW REQUIRES DELIVERY
OF THIS PROSPECTUS, THIS PROSPECTUS WILL BE AMENDED OR SUPPLEMENTED ACCORDING-
LY.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary......................................................... 3
Fee Table.................................................................. 9
The Trust.................................................................. 10
Use of Proceeds............................................................ 10
Investment Objective and Policies.......................................... 10
Investment Restrictions.................................................... 20
Risk Factors............................................................... 21
Description of the STRYPES................................................. 24
Trustees................................................................... 26
Management Arrangements.................................................... 27
Dividends and Distributions................................................ 28
Net Asset Value............................................................ 28
Certain United States Federal Income Tax Considerations.................... 29
Underwriting............................................................... 35
Legal Matters.............................................................. 36
Experts.................................................................... 36
Additional Information..................................................... 37
Independent Auditors' Report............................................... 38
Statement of Assets, Liabilities and Capital............................... 39
</TABLE>
Prospectus relating to Common Stock
of Snyder Communications, Inc.
---------------
UNTIL , 1997 (25 DAYS AFTER THE COMMENCEMENT OF THE OFFERING), ALL DEAL-
ERS EFFECTING TRANSACTIONS IN THE STRYPES, WHETHER OR NOT PARTICIPATING IN
THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY RE-
QUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS
WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
================================================================================
================================================================================
4,000,000 STRYPES(SM)
SNYDER STRYPES TRUST
(EXCHANGEABLE FOR SHARES OF
COMMON STOCK OF
SNYDER COMMUNICATIONS, INC.)
---------------
PROSPECTUS
---------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
MONTGOMERY SECURITIES
BEAR, STEARNS & CO. INC.
, 1997
(SM)SERVICE MARK OF MERRILL LYNCH & CO., INC.
================================================================================
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
1. FINANCIAL STATEMENTS
Independent Auditors' Report
Statement of Assets, Liabilities and Capital as of , 1997
2. EXHIBITS
(a)(1) Trust Agreement*
(2) Form of Amended and Restated Trust Agreement**
(3) Certificate of Trust*
(b) Not applicable
(c) Not applicable
(d)(1) Form of Specimen certificate for STRYPES (included in Exhibit
2(a)(2))**
(2) Portions of the Declaration of Trust of the Registrant defining the
rights of Holders of STRYPES (included in Exhibit 2(a)(2))**
(e) Not applicable
(f) Not applicable
(g) Not applicable
(h)(1) Form of Purchase Agreement**
(2) Form of Registration Agreement**
(i) Not applicable
(j) Form of Custodian Agreement**
(k)(1) Form of Administration Agreement**
(2) Form of Paying Agent Agreement**
(3) Form of Forward Purchase Contract**
(4) Form of Security and Pledge Agreement**
(5) Form of Fund Expense Agreement**
(6) Form of Fund Indemnity Agreement**
(l) Opinion and Consent of Brown & Wood llp, counsel to the Trust**
(m) Not applicable
(n)(1) Tax Opinion and Consent of Brown & Wood llp, counsel to the Trust**
(2) Consent of , independent auditors for the Trust**
(o) Not applicable
(p) Form of Subscription Agreement**
(q) Not applicable
(r) Financial Data Schedule**
- --------
* Filed herewith.
** To be filed by amendment.
C-1
<PAGE>
ITEM 25. MARKETING ARRANGEMENTS
See Exhibits (h)(1) and (h)(2) to this Registration Statement.
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be incurred in connection with the offering described in
this Registration Statement will be paid by the Contracting Stockholder.
ITEM 27. PERSON CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
The Trust will be internally managed and will not have an investment
adviser. The information in the Prospectus under the caption "Management
Arrangements" is incorporated herein by reference.
ITEM 28. NUMBER OF HOLDERS OF SECURITIES
There will be one record holder of the STRYPES as of the effective date of
this Registration Statement.
ITEM 29. INDEMNIFICATION
Section 7.6 of the Amended and Restated Trust Agreement, Section 6 of the
Purchase Agreement and Section 4 of the Registration Agreement provide for
indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "1933 Act"), may be permitted to trustees, 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 (the "Commission") such
indemnification is against public policy as expressed in the 1933 Act 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 trustee, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such trustee, 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 1933 Act and will be governed by the
final adjudication of such issue.
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The Trust is internally managed and does not have an investment adviser.
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940, as amended, and the rules
promulgated thereunder are maintained at the offices of the Registrant (850
Library Avenue, Suite 204, Newark, Delaware 19715), its custodian (101 Barclay
Street, New York, New York 10286) and its paying agent (101 Barclay Street,
New York, New York 10286).
ITEM 32. MANAGEMENT SERVICES
Not applicable.
ITEM 33. UNDERTAKINGS
(a) The Registrant hereby undertakes to suspend the offering of the shares
covered hereby until it amends its prospectuses contained herein if (1)
subsequent to the effective date of this Registration Statement, its net asset
value per share declines more than 10 percent from its net asset value per
share as of the effective date of
C-2
<PAGE>
the Registration Statement or (2) the net asset value per share increases to
an amount greater than its net proceeds as stated in the prospectuses
contained herein.
(b) The Registrant hereby undertakes that (i) for purpose of determining any
liability under the 1933 Act, the information omitted from the form of
prospectuses filed as part of this Registration Statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the registrant under
Rule 497(h) under the 1933 Act shall be deemed to be part of this registration
statement as of the time it was declared effective; (ii) for the purpose of
determining any liability under the 1933 Act, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide offering
thereof.
C-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Newark, State of Delaware, on the
15th day of August, 1997.
Snyder STRYPES Trust
/s/ Donald J. Puglisi
By: _________________________________
Donald J. Puglisi
Managing Trustee
Each person whose signature appears below hereby authorizes Donald J.
Puglisi, William R. Latham III, or James B. O'Neill, or any of them, as
attorney-in-fact, to sign on his behalf, individually and in each capacity
stated below, any amendment to this Registration Statement (including post-
effective amendments) and to file the same, with all exhibits thereto, with
the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons, in the
capacities and on the date indicated.
NAME TITLE DATE
/s/ Donald J. Puglisi Managing Trustee August 15, 1997
- -------------------------------------
DONALD J. PUGLISI
/s/ William R. Latham III Trustee August 15, 1997
- -------------------------------------
WILLIAM R. LATHAM III
/s/ James B. O'Neill Trustee August 15, 1997
- -------------------------------------
JAMES B. O'NEILL
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
(a)(1) Trust Agreement*
(2) Form of Amended and Restated Trust Agreement**
(3) Certificate of Trust*
(b) Not applicable
(c) Not applicable
(d)(1) Form of Specimen certificate for STRYPES (included in Exhibit
2(a)(2))**
(2) Portions of the Declaration of Trust of the Registrant defining
the rights of Holders of STRYPES (included in Exhibit
2(a)(2))**
(e) Not applicable
(f) Not applicable
(g) Not applicable
(h)(1) Form of Purchase Agreement**
(2) Form of Registration Agreement**
(i) Not applicable
(j) Form of Custodian Agreement
(k)(1) Form of Administration Agreement**
(2) Form of Paying Agent Agreement**
(3) Form of Forward Purchase Contract**
(4) Form of Security and Pledge Agreement**
(5) Form of Fund Expense Agreement**
(6) Form of Fund Indemnity Agreement**
(l) Opinion and Consent of Brown & Wood llp, counsel to the Trust**
(m) Not applicable
(n)(1) Tax Opinion and Consent of Brown & Wood llp, counsel to the
Trust**
(2) Consent of , independent auditors for the Trust**
(o) Not applicable
(p) Form of Subscription Agreement**
(q) Not applicable
(r) Financial Data Schedule**
</TABLE>
- --------
* Filed herewith.
** To be filed by amendment.
<PAGE>
Exhibit (a)(1)
TRUST AGREEMENT OF SNYDER STRYPES TRUST
TRUST AGREEMENT, dated as of August 5, 1997 among Theresa M. Cetina,
as Depositor, and Donald J. Puglisi, William R. Latham III and James B. O'Neill,
as Trustees. The Depositor and the Trustees hereby agree as follows:
1. The trust created hereby shall be known as "Snyder STRYPES
Trust", in which name the Trustees may conduct the business of the Trust, make
and execute contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over
to the Trustees the sum of $1. The Trustees hereby acknowledge receipt of such
amount in trust from the Depositor, which amount shall constitute the initial
trust estate. The Trustees hereby declare that they will hold the trust estate
in trust for the Depositor. It is the intention of the parties hereto that the
Trust created hereby constitute a business trust under Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. (S) 3801, et seq. and that this document
-------
constitute the governing instrument of the Trust. The Trustees are hereby
authorized and directed to execute and file a certificate of trust with the
Delaware Secretary of State in the form attached hereto.
3. The Depositor and the Trustees will enter into an amended and
restated Trust Agreement, satisfactory to each such party, to provide for the
contemplated operation of the Trust created hereby. Prior to the execution and
delivery of such
<PAGE>
amended and restated Trust Agreement, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except as otherwise
required by applicable law or as may be necessary to obtain prior to such
execution and delivery any licenses, consents or approvals required by
applicable law or otherwise.
4. This Trust Agreement may be executed in one or more counterparts.
5. The Trustees may resign upon thirty days prior notice to the
Depositor.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
DEPOSITOR
/s/ Theresa M. Cetina
---------------------
Theresa M. Cetina,
as Depositor
TRUSTEE
/s/ Donald J. Puglisi
---------------------
Donald J. Puglisi,
as Trustee
TRUSTEE
/s/ William R. Latham III
-------------------------
William R. Latham III,
as Trustee
TRUSTEE
/s/ James B. O'Neill
--------------------
James B. O'Neill,
as Trustee
3
<PAGE>
Exhibit (a)(3)
CERTIFICATE OF TRUST
OF
SNYDER STRYPES TRUST
This Certificate of Trust of Snyder STRYPES Trust (the "Trust") is being
duly executed and filed by the undersigned trustees of the Trust, dated as of
August 5, 1997, for the purposes of organizing a business trust pursuant to the
Delaware Business Trust Act, 12 Del. C. (S)(S) 3801 et seq. (the "Act").
---- -- -- ---
The undersigned hereby certify as follows:
1. Name. The name of the business trust is "Snyder STRYPES Trust".
----
2. Registered Office; Registered Agent. The business address of the
-----------------------------------
registered office of the Trust in the State of Delaware is One Rodney Square,
10th Floor, 10th and King Streets, in the City of Wilmington, County of New
Castle 19801. The name of the Trust's registered agent at such address is RL&F
Service Corp.
3. Effective Date. This Certificate of Trust shall be effective upon
--------------
filing in the Office of the Secretary of State of the State of Delaware.
4. Other Matters. The Trust will be a registered investment company
-------------
under the Investment Company Act of 1940, as amended.
IN WITNESS WHEREOF, the undersigned, being trustees of the Trust, have duly
executed this Certificate of Trust as of the day and year first above written.
By: /s/ Donald J. Puglisi
-----------------------------------------
Donald J. Puglisi, Trustee
By: /s/ William R. Latham III
-----------------------------------------
William R. Latham III, as Trustee
By: /s/ James B. O'Neill
-----------------------------------------
James B. O'Neill, as Trustee
