SNYDER COMMUNICATIONS INC, S-4, 1999-06-28

SNYDER COMMUNICATIONS INC
S-4, 1999-06-28
BUSINESS SERVICES, NEC

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As filed with the Securities and Exchange Commission on June 28, 1999

Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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SNYDER COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 7389 52-1983617
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification Number)
incorporation or Classification Code
organization) Number)
Two Democracy Center
6903 Rockledge Drive, 15th Floor
Bethesda, Maryland 20817
(301) 468-1010
(Address, including ZIP code, and telephone number, including area code, of
registrant's principal executive offices)

A. Clayton Perfall
Chief Financial Officer
Two Democracy Center
6903 Rockledge Drive, 15th Floor
Bethesda, Maryland 20817
(301) 468-1010
(Name, Address, including zip code, and telephone number, including area code,
of agent for service)

Copy to:
Norman D. Chirite, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8000

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

Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.

If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, 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(d)
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: [_]

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CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Proposed Proposed
Maximum Maximum
Title of Each Class of Amount to Offering Price Aggregate Amount of
Securities to be Registered be Registered(1) Per Share Offering Price(2) Registration Fee(2)
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<S> <C> <C> <C> <C>
Snyder Communications,
Inc. ................. N/A N/A (2) (2)
SNC Common Stock, $.001
par value
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Snyder Communications,
Inc. ................. N/A N/A (2) (2)
circle.com Common Stock,
$.001 par value
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</TABLE>
(1) If the recapitalization proposal described herein is approved by the
stockholders, each share of the Registrant's common stock, par value $.001
per share (the "existing common stock"), will be changed into one share of
Snyder Communications, Inc.--SNC common stock, par value $.001 per share
("SNC stock") and 0.25 of a share (the "ratio") of Snyder Communications,
Inc.--circle.com common stock, par value $.001 per share ("circle.com
stock"). The number of shares of SNC stock being registered is equal to the
number of shares of existing common stock outstanding immediately before
the recapitalization proposal is implemented, and the number of shares of
circle.com stock being registered is equal to the ratio times the number of
shares of existing common stock outstanding immediately before the
recapitalization proposal is implemented. In accordance with Rule 457(o)
under the Securities Act of 1933, the number of shares being registered is
not included in the table.
(2) An aggregate offering price of $2,109,181,584 has been estimated and an
aggregate registration fee of $586,353 is being paid for the SNC stock and
the circle.com stock being registered. Such amounts have been estimated
solely for the purpose of calculating the registration fee pursuant to Rule
457(f)(1) under the Securities Act based on a price of $27.90625 per share
of the existing common stock, calculated on the basis of the average high
and low prices of shares of existing common stock on the New York Stock
Exchange on June 22, 1999, as reported in published financial sources.

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

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 or until this Registration Statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may
determine.

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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this proxy statement and prospectus is not complete and +
+may be changed. We may not distribute the securities until the registration +
+statement filed with the Securities and Exchange Commission is effective. +
+This proxy statement and prospectus is not an offer to sell the securities +
+and it is not soliciting an offer to buy these securities in any state where +
+an offer or sale is not permitted. +
+ +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to completion, dated June 28, 1999

Proxy Statement of

[SNYDER COMMUNICATIONS, INC. LOGO]

Special Meeting of Stockholders to be
Held at [10:00] A.M., Eastern Time, on , 1999

------------
Prospectus of

[SNYDER COMMUNICATIONS, INC. LOGO]

SNC Common Stock circle.com Common Stock

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

Dear Stockholders:

You are invited to attend a special meeting of our stockholders, to be held
at The Four Seasons Hotel, located at 2800 Pennsylvania Avenue, N.W.,
Washington, D.C. 20007.

At the special meeting, we will ask you to consider and adopt a
recapitalization proposal recommended by our board of directors. We propose to
adopt an amended and restated certificate of incorporation which would replace
our existing common stock with two new classes of common stock called
circle.com stock and SNC stock. The circle.com stock is intended to reflect
separately the performance of our Internet professional services business which
we call circle.com. The SNC stock is intended to reflect separately the
performance of our remaining businesses and a retained interest in circle.com,
which we call SNC. The recapitalization proposal will permit separate market
valuations of the circle.com stock and the SNC stock based on the separate
operating results of circle.com and SNC. This will enable you to gain a better
understanding of those businesses and to invest in either or both securities
depending upon your investment objectives.

If stockholders approve the recapitalization proposal and the other proposals
we will ask you to consider at the special meeting, each share of your existing
common stock will be changed into one share of SNC stock and .25 of a share of
circle.com stock. The shares of circle.com stock that you receive in the
recapitalization will initially represent 80% of the equity value attributed to
circle.com. The remaining equity value attributed to circle.com will remain
with SNC as its "retained interest" in circle.com. You will not be required to
send in your existing common stock certificates. If the recapitalization is
implemented, your existing common stock certificates will represent SNC stock
and we will send you new certificates representing your circle.com stock and
cash for any fractional shares. We expect to effect the recapitalization
proposal shortly following the special meeting. The recapitalization should be
tax-free to you and us, except with respect to any cash you receive in lieu of
fractional shares. We will seek to list the circle.com stock on the Nasdaq
National Market System under the symbol "CRCM." We will also seek to have the
existing common stock redesignated as SNC stock on the New York Stock Exchange
and to continue its listing on the NYSE under the symbol "SNC."

Our principal reason for pursuing the recapitalization proposal is to create
a separate stock that relates solely to our interactive and e-commerce
activities. The creation of a separate stock will also create a vehicle for
providing stock options and stock ownership in circle.com stock to attract and
retain key management of circle.com.

At the special meeting, we will also ask you to consider and approve related
proposals to adopt our amended and restated stock incentive plan and amended
and restated stock purchase plan. Our board of directors considers the
recapitalization proposal and each of the stock plan proposals to be part of an
integrated plan and approval of each part of the plan to be necessary in order
to implement the plan as a whole. Accordingly, even though we are presenting
these proposals separately, we will not implement any of them unless each is
approved.
<PAGE>

As we announced on June 23, 1999, we also intend to spin-off our healthcare
services business. Our board of directors has approved the spin-off in which we
will transfer all of the assets and liabilities of the healthcare services
business to a separate company and then distribute shares of that company to
you. We expect to distribute the shares of the healthcare services company on
, 1999 to stockholders of record on , 1999. The spin-off is not
conditioned upon approval of the recapitalization and is expected to be
completed before the implementation of the recapitalization proposal.
Information about the spin-off is contained in an information statement, which
is attached to this proxy statement and prospectus as Annex D.

Our board of directors unanimously recommends that you vote in favor of the
recapitalization and related proposals. This proxy statement and prospectus
provides you with detailed information about the recapitalization and related
proposals. We encourage you to read this entire document carefully.

Daniel M. Snyder
Chairman and Chief Executive Officer

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The recapitalization and related proposals involve certain risks. Please read
the "Risk Factors" beginning on page 17.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this proxy statement and prospectus is truthful or complete. Any representation
to the contrary is a criminal offense.

This proxy statement and prospectus is dated , 1999 and is first being
mailed to stockholders on , 1999.

HOW YOU CAN OBTAIN MORE INFORMATION

This proxy statement and prospectus incorporates important business and
financial information that is not included in or delivered with this document.
You may request a copy of this information at no cost, by writing or
telephoning us at the following address:

Snyder Communications, Inc.
Two Democracy Center
6903 Rockledge Drive, 15th Floor
Bethesda, Maryland 20817
Attention: Secretary
Telephone: (301) 468-1010

To obtain timely delivery, you must make this request no later than five
business days before , 1999, the date of the special meeting.

3
<PAGE>

[SNYDER COMMUNICATIONS, INC. LOGO]
6903 Rockledge Drive
15th Floor
Bethesda, Maryland 20817

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Notice of Special Meeting of Stockholders
To be Held on , 1999.

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, 1999

To our stockholders:

We hereby give you notice that a special meeting of our stockholders will be
held at The Four Seasons Hotel, 2800 Pennsylvania Avenue, N.W., Washington,
D.C. 20007 on , , 1999, at [10:00] a.m., eastern time. The special
meeting will be held for the following purposes and to transact any other
business as may properly come before the meeting or any adjournments of the
meeting:

1. To consider and act upon a proposal to adopt an amended and restated
certificate of incorporation under which each outstanding share of our
existing common stock will be changed into one share of SNC stock and .25
of a share of circle.com stock;

2. To consider and act upon a proposal to adopt our amended and restated
stock incentive plan to provide for the granting of stock awards and
options in SNC stock and circle.com stock; and

3. To consider and act upon a proposal to adopt our amended and restated
employee stock purchase plan to permit employees to purchase shares of both
SNC stock and circle.com stock at a discount.

The attached proxy statement and prospectus contains information relating to
the three proposals.

Your board of directors has fixed the close of business on , 1999 as the
record date to determine the stockholders entitled to notice of and to vote at
the special meeting. Only the stockholders of record at the close of business
on that date will be entitled to vote at the meeting. A list of those
stockholders will be available for inspection before or at the meeting. The
transfer books of Snyder Communications will not be closed.

By order of the board of directors,

David B. Pauken
Secretary

Your vote is very important. Whether or not you expect to attend the meeting,
please sign and date the enclosed proxy and mail it promptly in the postage-
paid envelope provided.

If you do not plan to attend the meeting, please mark the appropriate box on
your proxy card. An admission card is included if you are a stockholder of
record. If your shares are held in street name, an admission card in the form
of a legal proxy will be sent to you by your broker. If you do not receive the
legal proxy in time, you will be admitted to the meeting by showing your most
recent brokerage statement verifying your ownership of common stock.
<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
QUESTIONS AND ANSWERS ABOUT PROPOSAL 1--THE RECAPITALIZATION PROPOSAL.... 1

PROXY STATEMENT AND PROSPECTUS SUMMARY................................... 4

SNYDER COMMUNICATIONS, INC. SELECTED FINANCIAL DATA...................... 12

SNC SELECTED FINANCIAL DATA.............................................. 14

CIRCLE.COM SELECTED FINANCIAL DATA....................................... 16

RISK FACTORS............................................................. 17

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS........................ 28

WHERE YOU CAN FIND MORE INFORMATION...................................... 28

INFORMATION ABOUT THE SPECIAL MEETING AND VOTING......................... 30
Date, Time And Place Of Meeting........................................ 30
Record Date............................................................ 30
Proposals To Be Considered At The Meeting.............................. 30
Vote Required To Approve The Proposals................................. 30
Quorum................................................................. 30
Procedure For Voting By Proxy.......................................... 31

PROPOSAL 1--THE RECAPITALIZATION PROPOSAL................................ 32
General................................................................ 32
Background and Reasons for the Recapitalization Proposal............... 33
Recommendation of the Board of Directors............................... 35
Dividend Policy........................................................ 35
Management and Allocation Policies..................................... 35
Description of SNC Stock and circle.com Stock.......................... 41
Certain Anti-Takeover Provisions of Delaware Law and the Amended and
Restated Certificate of Incorporation and By-Laws..................... 56
Material Federal Income Tax Consequences............................... 57
Stock Exchange Listing of the Common Stocks............................ 59
Exchange Procedures.................................................... 59
Stock Transfer Agent and Registrar..................................... 60
Financial Advisors..................................................... 60
Effect on Existing Options............................................. 60
No Dissenters' Rights.................................................. 60

THE HEALTHCARE SERVICES BUSINESS SPIN-OFF................................ 61

SNYDER COMMUNICATIONS--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS..................................... 62

SNC--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS............................................... 70

SNC--BUSINESS............................................................ 78
General................................................................ 78
Industry Overview...................................................... 78
Industry Trends........................................................ 78
Growth Strategy........................................................ 79
Operations............................................................. 81
</TABLE>

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<TABLE>
<CAPTION>
Page
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<S> <C>
Competition............................................................ 86
Regulation............................................................. 87
Management............................................................. 88
Employees.............................................................. 88
Properties............................................................. 89

CIRCLE.COM--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS..................................... 90

CIRCLE.COM--BUSINESS..................................................... 94
General................................................................ 94
Industry Background.................................................... 94
Client Engagement Approach............................................. 95
Services............................................................... 95
Growth Strategy........................................................ 96
Client Case Studies.................................................... 97
System Architecture and Design of the DME(TM).......................... 100
Personnel and Culture.................................................. 101
Intellectual Property Rights........................................... 101
Competition............................................................ 102
U.S. and Foreign Government Regulation................................. 102
Management............................................................. 104
Properties............................................................. 104

PROPOSAL 2--ADOPTION OF AMENDED AND RESTATED STOCK INCENTIVE PLAN........ 105
Background and Reasons for the Proposal................................ 105
Summary of the Stock Incentive Plan.................................... 105
Recommendation of the Board of Directors............................... 112

PROPOSAL 3--ADOPTION OF AMENDED AND RESTATED STOCK PURCHASE PLAN......... 113
Background and Reasons for the Proposal................................ 113
Summary of the Stock Purchase Plan..................................... 113
Recommendation of the Board of Directors............................... 117

EXECUTIVE COMPENSATION................................................... 118

PRICE RANGE ON EXISTING COMMON STOCK AND DIVIDEND POLICY................. 119

INFORMATION ABOUT STOCKHOLDER PROPOSALS.................................. 119

EXPENSES OF SOLICITATION................................................. 120

LEGAL OPINIONS........................................................... 120

EXPERTS.................................................................. 120

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS............................... F-1

ANNEX A--Amended and Restated Certificate of Incorporation of Snyder
Communications, Inc.

ANNEX B--Second Amended and Restated 1996 Stock Incentive Plan of Snyder
Communications, Inc.

ANNEX C--Amended and Restated Employee Stock Purchase Plan of Snyder
Communications, Inc.

ANNEX D--Information Regarding the Healthcare Services Spin-off
</TABLE>

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<PAGE>

QUESTIONS AND ANSWERS
ABOUT PROPOSAL 1--THE RECAPITALIZATION PROPOSAL

Why am I receiving this proxy statement?

We are sending this proxy statement and prospectus to you in connection with
a recapitalization proposal to adopt an amended and restated certificate of
incorporation which would replace our existing common stock with two new
classes of common stock--SNC stock and circle.com stock.

The board of directors is seeking your proxy to vote in favor of the
recapitalization proposal at a special meeting of stockholders. At the meeting,
you will also be asked to vote on related proposals to adopt our amended and
restated employee stock incentive and stock purchase plans.

When and where will the special meeting be held?

The special meeting will be held on , 1999, at [10:00] a.m. local time, at
The Four Seasons Hotel, located at 2800 Pennsylvania Avenue, N.W., Washington,
D.C. 20007.

What are the new classes of common stock?

The new classes of common stock consist of the SNC stock and the circle.com
stock. We refer to the SNC stock and the circle.com stock together as the
"common stock."

. The circle.com stock is intended to reflect the separate performance of our
Internet professional services business--which we call "circle.com."

. The SNC stock is intended to reflect the separate performance of our
remaining businesses and a retained interest in circle.com--which we call
"SNC."

Investors commonly refer to this type of common stock as "tracking stock,"
"targeted stock" or "letter stock," because the stock is intended to "track" or
"target" the separate performance of a group of assets or a division of a
company.

The shares of circle.com stock that you receive in the recapitalization will
initially represent 80% of the equity value attributed to circle.com. The
remaining equity value attributed to circle.com will remain with SNC as its
"retained interest" in circle.com.

How will I benefit from the recapitalization proposal?

You will be able to separately value the circle.com stock and SNC stock. You
will be able to invest in either or both stocks depending upon your investment
objectives.

Why is Snyder Communications proposing the recapitalization?

What will my existing common stock represent if the recapitalization proposal
is implemented?

Each share of our existing common stock will be automatically changed into
one share of SNC stock and .25 of a share of circle.com stock. For example if
you own 175 shares of existing common stock, upon the recapitalization you
would own 175 shares of SNC stock and 43 shares of circle.com stock. You would
also receive cash in lieu of .75 of a share of circle.com stock. The cash would
be based on the closing price of the circle.com stock on the date the
recapitalization proposal is implemented.

Do I have to send in my existing common stock certificates?

No. If the recapitalization is implemented, your existing common stock
certificates, which currently represent a number of shares of existing common
stock, will be redesignated to represent the same number of shares of SNC
stock. We will send you new certificates representing the whole number of

1
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shares of circle.com stock to which you are entitled and any cash payable in
lieu of a fractional share of circle.com stock.

What are the tax consequences to me?

The recapitalization should be tax-free to you, except with respect to any
cash you receive in lieu of fractional shares.

Will the recapitalization proposal result in a change of control of Snyder
Communications?

No. The principal stockholders of Snyder Communications today will continue
to be the principal stockholders of Snyder Communications following
implementation of the recapitalization proposal. Daniel M. Snyder, our Chairman
of the Board of Directors and Chief Executive Officer, and Michele D. Snyder,
our Vice Chairman, President and Chief Operating Officer and a director,
beneficially own approximately 12.4% and 4.4%, respectively, of the outstanding
shares of existing common stock and will own the same percentage of common
stock of Snyder Communications following implementation of the recapitalization
proposal.

What kind of financial information will I receive in the future?

You will continue to receive consolidated financial information for Snyder
Communications as a whole. In addition, you will receive separate operating
results and other business and financial information for both SNC and
circle.com.

Will the recapitalization proposal result in a spin-off?

No. The recapitalization proposal will not result in a distribution or spin-
off of our assets or liabilities and will not affect ownership of our assets or
responsibility for our liabilities. Holders of SNC stock and circle.com stock
will continue to be stockholders of a single company (Snyder Communications)
and subject to all risks associated with an investment in Snyder Communications
and all of our businesses, assets and liabilities.

Will Snyder Communications split-off circle.com in the future?

The recapitalization will not prevent a split-off of circle.com to the
holders of circle.com stock in the future if our board of directors determined
it was in the best interests of our company and our stockholders to do so. A
split-off of circle.com would not require stockholder approval. Our board of
directors currently has no plans to split-off circle.com.

What is the spin-off of the healthcare services business?

As we announced on June 23, 1999, we intend to spin-off our healthcare
services business. Our board of directors has approved the spin-off in which we
will transfer all of the assets and liabilities of the healthcare services
business to a separate company and then distribute shares of that company to
you. The spin-off is not conditioned upon approval of the recapitalization and
is expected to be completed before the implementation of the recapitalization
proposal. Information about the spin-off is contained in an information
statement, which is attached to this proxy statement and prospectus as Annex D.

What does our board of directors recommend?

Our board of directors has unanimously approved each proposal and believes
that the adoption of each proposal is in the best interests of Snyder
Communications and its stockholders. Our board of directors unanimously
recommends that you vote "FOR" the recapitalization and related proposals.

What do I need to do now?

Just mail in your signed proxy card in the enclosed return envelope as soon
as possible, so that your shares may be represented at the special meeting.

If I hold my shares through a broker, how do I vote on the recapitalization and
related proposals?

You should contact your broker directly to determine the procedures through
which you can vote on the recapitalization and related proposals.

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<PAGE>

What are the consequences of my not voting on the recapitalization and related
proposals?

Your failure to vote on the recapitalization proposal will have the same
effect as a vote against the proposal. Your failure to vote on the stock
incentive plan and stock purchase plan proposals will not be considered a vote
either for or against the proposals. However, our board of directors considers
the recapitalization proposal and each of the stock plan proposals to be part
of an integrated plan and approval of each part of the plan to be necessary in
order to implement the plan as a whole. Accordingly, even though we are
presenting these proposals separately, we will not implement any of them unless
each is approved.

What do I do if I have additional questions?

If you have any questions prior to the special meeting, please call InnisFree
M&A Incorporated, Snyder Communications' solicitation agent. InnisFree may be
reached at 1-800- - .

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<PAGE>

PROXY STATEMENT AND PROSPECTUS SUMMARY

This summary, together with the "Proposal 1--Questions and Answers About the
Recapitalization Proposal" on the preceding pages, highlights important
selected information from this document. To understand the recapitalization and
related proposals fully and for a more complete description of the legal terms
of the proposals, you should read carefully this entire document and the
documents we have referred you to. We have included page references
parenthetically to direct you to a more complete description of the topics
presented in this summary.

Snyder Communications, Inc.

Our businesses are SNC, circle.com and our healthcare services group. As we
announced on June 23, 1999, we expect to spin-off our healthcare services
business to you prior to the implementation of the recapitalization proposal.
Accordingly, the healthcare services business is reported in this proxy
statement and prospectus as a discontinued operation. We briefly describe SNC's
business and circle.com's business below. We describe the healthcare services
business and the spin-off in Annex D.

If the recapitalization proposal is implemented, from a financial reporting
standpoint, we intend to separate our Internet professional services business--
which we call circle.com--from the rest of our businesses--which we call SNC.
We intend our circle.com stock to track the performance of circle.com, and we
intend our SNC stock to track the performance of SNC and a retained interest in
circle.com. The shares of circle.com stock that you receive in the
recapitalization will initially represent 80% of the equity value attributed to
circle.com. The remaining equity value attributed to circle.com will remain
with SNC as its retained interest in circle.com.

Our corporate headquarters are located at Two Democracy Center, 6903
Rockledge Drive, Bethesda, Maryland 20817, and our telephone number is (301)
468-1010.

For additional information relating to our business, operations, properties
and other matters, see "SNC--Business" and "Circle.com--Business" and the
documents referred to under "Where You Can Find More Information." For
additional information relating to our healthcare services business, see Annex
D.

SNC (page 78)

SNC is one of the world's leading international full-service direct
marketing, advertising and communications agencies, with operations throughout
the United States, the United Kingdom and continental Europe. SNC provides
direct marketing services to its clients through BrannWorldwide and Bounty SCA
Worldwide and advertising services through Arnold Communications. SNC's clients
are primarily global companies with large annual sales and marketing
expenditures facing significant competitive pressures to retain or expand their
respective market share. These clients operate in a broad range of industries,
including automotive, consumer packaged goods, financial services,
telecommunications and gas and electric utilities.

SNC believes it is well positioned to capitalize on the following industry
trends:
. growth in the direct marketing, advertising and communications markets;
. increased emphasis on direct marketing;
. increased focus on brand development; and
. demand for integrated service offerings.

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<PAGE>

In order to capitalize on these trends and to continue our growth, SNC plans
to:

. capitalize on existing networks;

. increase the penetration of its significant clients;

. develop new client relationships;

. maintain its creative excellence; and

. utilize its "Brand Essence" strategic and creative philosophy.

SNC also includes a retained interest in circle.com. This retained interest
will initially be 20% but could vary from time to time.

Circle.com (page 94)

Circle.com is a leading Internet professional services provider that creates
Internet-based customer relationship management systems for its Fortune 1000
and emerging Internet-based clients. These systems use circle.com's proprietary
technology process to enable its clients to identify, acquire and retain
customers while creating and establishing new revenue channels. Circle.com
provides all the services necessary to create these systems, including
Internet-based strategic consulting, consumer research, online media planning
and creative design, which it refers to as "front-end services," as well as
systems integration, e-commerce architectures, automated marketing systems and
performance diagnostics, which it refers to as "back-end services."

Circle.com considers the Internet to be the most powerful tool yet developed
for managing the customer relationships of Fortune 1000 and emerging Internet-
based companies on a one-on-one basis. The proliferation of the Internet has
had a profound impact on businesses as they begin to realize its potential to
extend and enhance the way they communicate with customers and conduct
business. According to International Data Corporation, a leading research firm,
the number of Internet users was 98 million worldwide at the end of 1998 and is
expected to continue to grow to 320 million by the end of 2002. Forrester
Research estimates that commerce over the Internet will grow from approximately
$43.0 billion in 1998 to $1.3 trillion in 2003.

Circle.com uses a multi-phase approach to engagements that allows it to
efficiently apply its resources to enhance its clients' businesses, including:

. identifying areas where Internet-based solutions would enhance its
clients' success;

. realizing an e-commerce business plan; and

. optimizing these e-commerce activities in order to further increase its
clients' businesses.

Circle.com delivers fully integrated services across multiple parts of a
client's business. This creates more of a partnership than a vendor
relationship. These services include:

. providing business consultancy services;

. developing brand positionings for specific customer segments;

. creating the user experience on the Internet;

. developing, installing and integrating Internet-based customer
relationship management systems;

. creating custom applications of circle.com's technology process, the
Dynamic Marketing Environment(TM) (DME(TM));

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<PAGE>

. planning and implementing media strategies that generate traffic to its
clients' web sites; and

. providing ongoing management, enhancement and optimization of e-commerce
enterprises.

The DME(TM) allows clients to access multiple customer data streams, analyze
the data and deploy highly-customized content to customers in real time.

As used in this proxy statement and prospectus, the term "circle.com" does
not represent a separately incorporated entity but rather refers to those
businesses, assets and liabilities intended to represent Snyder Communications'
Internet professional services business. Circle.com is separated solely from a
financial reporting standpoint. We have set up a company called circle.com Inc.
which may be used to hold the assets and liabilities of circle.com's business.
If in the future our board of directors determined to split-off circle.com to
the holders of circle.com stock, having circle.com's assets and liabilities in
one entity would facilitate the split-off.

We maintain a site on the World Wide Web at www.circle.com; however, the
information found on our website is not a part of this proxy statement and
prospectus.

Circle.com, Dynamic Marketing Environment(TM) and DME(TM) are trademarks of
Snyder Communications.

The Special Meeting

Proposals to be considered at the meeting (page 30)

You are being asked to consider and vote upon the following proposals at the
special meeting:

. Proposal 1: The recapitalization proposal (page 32).

. Proposal 2: A proposal to adopt our amended and restated stock incentive
plan to provide for the granting of stock awards and options in SNC
stock and circle.com stock (page 105).

. Proposal 3: A proposal to adopt our amended and restated employee stock
purchase plan to permit employees to purchase shares of both SNC stock
and circle.com stock at a discount (page 113).

Our board of directors considers the recapitalization proposal and each of
the stock plan proposals to be part of an integrated plan and approval of each
part of the plan to be necessary in order to implement the plan as a whole.
Accordingly, even though we are presenting these proposals separately, we will
not implement any of them unless each is approved.

Vote required to approve the proposals (page 30)

The following stockholder votes are required for approval of the proposals:

. Proposal 1: The favorable vote of the holders of a majority of the
outstanding shares of our existing common stock.

. Proposals 2 and 3: The favorable vote of the holders of a majority of
the votes cast at the special meeting.

Our directors and executive officers beneficially owned approximately 26.8%
of the outstanding shares of our existing common stock as of June 22, 1999.

6
<PAGE>

Comparison of Existing Common Stock with SNC
Stock and circle.com Stock (page 41)

We have provided in the following table a comparison of our existing common
stock and the SNC stock and circle.com stock. You should keep in mind that you
will remain stockholders of a single company. SNC and circle.com are not
separate legal entities. As a result, you will continue to be subject to all of
the risks associated with an investment in Snyder Communications and all of our
businesses, assets and liabilities. In this proxy statement and prospectus,
each of SNC and circle.com is sometimes called a "group." Financial effects
from one group that affect our consolidated results of operations or financial
condition could, if significant, affect the results of operations or financial
condition of the other group.

<TABLE>
<CAPTION>
The Recapitalization Proposal
--------------------------------------------
Existing SNC circle.com
Common Stock Stock Stock
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
Basic Our existing common We intend SNC stock We intend circle.com
Investment stock reflects the to reflect the stock to reflect the
Characteristics: performance of all of performance of SNC. performance of our
our businesses. SNC will include our Internet professional
direct marketing, services business.
advertising and
communications We cannot assure you
business, along with that the market value
a retained interest of circle.com stock
in circle.com. The will in fact reflect
retained interest the performance of
will initially be 20% circle.com as we
but could vary from intend. Holders of
time to time. circle.com stock will
continue to be common
We cannot assure you stockholders of
that the market value Snyder Communications
of SNC stock will in and, as such, will be
fact reflect the subject to all risks
performance of SNC as associated with an
we intend. Holders of investment in Snyder
SNC stock will Communications and
continue to be common all of our
stockholders of businesses, assets
Snyder Communications and liabilities.
and, as such, will be
subject to all risks
associated with an
investment in Snyder
Communications and
all of our
businesses, assets
and liabilities.

Number of 400 million shares of 320 million shares of 80 million shares of
authorized existing common SNC stock. circle.com stock.
shares of stock.
common stock:

Dividends: Historically, we have We do not intend to We do not intend to
not paid cash pay dividends in the pay dividends in the
dividends on our foreseeable future. foreseeable future.
existing common Dividends are at the Dividends are at the
stock. discretion of our discretion of our
board of directors. board of directors.

Voting rights: One vote per share. One vote per share. More than, less than
or exactly one vote
The holders of the per share depending
two classes of common on the relative
stock will vote market values of the
together as a single two classes of common
class except in stock.
limited
circumstances. The holders of the
two classes of common
stock will vote
together as a single
class except in
limited
circumstances.
</TABLE>

7
<PAGE>

<TABLE>
<CAPTION>
The Recapitalization Proposal
--------------------------------------------
Existing SNC circle.com
Common Stock Stock Stock
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
Stock exchange NYSE under the symbol We will seek to have We will seek the
listing: "SNC." the existing common listing of the
stock redesignated as circle.com stock on
SNC stock on the NYSE the Nasdaq National
and to continue its Market System under
listing on the NYSE the symbol "CRCM."
under the symbol
"SNC."

Rights on sale None. None. If we sell all or
of all or substantially all of
substantially the assets attributed
all assets of to circle.com, we
a group: must either: (1) pay
a dividend to holders
of circle.com stock
equal to a
proportionate
interest in the net
proceeds of that
sale; (2) redeem
outstanding shares of
circle.com stock from
their holders for an
amount equal to a
proportionate
interest in the net
proceeds of that
sale; or (3) issue
SNC stock in exchange
for outstanding
circle.com stock at a
10% premium to the
value of the
circle.com stock
being exchanged. We
will not be required
to take any of these
actions if: (1) the
sale is in connection
with the liquidation
of Snyder
Communications;
(2) the sale is a
split-off of
circle.com to the
holders of circle.com
stock; (3) the sale
is to a person or
entity controlled by
Snyder
Communications; or
(4) the sale results
in Snyder
Communications
receiving primarily
equity securities of
any entity that
acquires the assets
and is primarily
engaged in a business
similar or
complementary to the
business engaged in
by circle.com.

Conversion None. Yes, at a % premium Yes, at a premium at
into common at any time and, if any time and, if
stock of the there are adverse there are adverse
other group U.S. federal income U.S. federal income
at option of tax law developments, tax law developments,
company: without any premium. without any premium.
The premium will be
% if the exchange
occurs in the first
quarter after
issuance of
circle.com stock and
will decline ratably
each quarter
thereafter over a
period of 3 years to
%.
</TABLE>

8
<PAGE>

<TABLE>
<CAPTION>
The Recapitalization Proposal
--------------------------------------------
Existing SNC circle.com
Common Stock Stock Stock
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
Redemption in None. None. We may redeem this
exchange for stock for stock of
stock of one of our
subsidiary: subsidiaries that
holds all of the
assets and
liabilities
attributed to
circle.com.

Liquidation: Holders share our net Holders will share Holders will share
assets remaining for assets remaining for assets remaining for
distribution to distribution to distribution to
holders of common holders of common holders of common
stock. stock on a per share stock on a per share
basis in proportion basis in proportion
to the liquidation to the liquidation
units per share. Each units per share. Each
share will have one share will have of
liquidation unit. a liquidation unit.
</TABLE>

Management and Allocation Policies (page 35)

We have established policies designed to accomplish the fundamental objective
of the recapitalization proposal, which is to highlight the separate
performance of each of SNC and circle.com and to allow each group to focus on
its own business strategy and financial model. These policies establish
guidelines to help us allocate debt, corporate overhead, interest, taxes and
other shared activities between the two groups on an objective basis and to
ensure that transactions between SNC and circle.com are made on terms that
approximate those that could be obtained from unaffiliated third parties.

Our inter-group policies will establish guidelines for:

. the centralized management of most financial activities;

. the allocation of indebtedness between groups or entirely to one group;

. the accounting for transfers of cash or other property from one group to
the other group;

. the financial effects of issuances of additional SNC stock or circle.com
stock;

. access to our technology and know-how, other than products and services,
by the groups, subject to certain exceptions;

. the transfer of assets between groups at fair value, including sales of
products and services between groups on terms that would be available
from unaffiliated third parties in commercial transactions, subject to
certain exceptions;

. the allocation of corporate opportunities in the best interests of
Snyder Communications; and

. the requirement that groups not engage in each other's principal
businesses, except for joint transactions with each other and with third
parties, but permitting indirect competition in certain situations.

Risk Factors (page 17)

When evaluating the recapitalization proposal, you should be aware that there
are many risks, including:

. the risks associated with an investment in a single company and all of
our businesses, assets and liabilities;

9
<PAGE>

. the risks to holders of each class of common stock who will have limited
rights related to their group;

. the risks associated with the relative voting power of the two classes
of common stock which will fluctuate based on their relative average
market values;

. limited stockholder remedies for breach of fiduciary duties;

. the potential for stockholders of each class of common stock to have
diverging or conflicting interests;

. the ability of our board of directors to change management and
allocation policies without stockholder approval;

. the ability of our board of directors to allocate financing costs
between groups that do not reflect the separate borrowing costs of the
groups;

. limits on consideration to be received upon disposition of assets of a
group;

. the effects of our capital structure and variable vote per share on
potential acquisitions of a group or class of common stock;

. decisions that affect market values of a class of common stock could
affect voting and conversion rights;

. no assurances as to the market price or liquidity of the SNC stock or
circle.com stock following the recapitalization;

. anti-takeover considerations could prevent stockholders from profiting
from an increase in the market value of their shares; and

. the lack of legal precedent and the recent Clinton Administration
proposal relating to the tax treatment of tracking stock issuances.

United States Federal Income Tax Consequences (page 57)

We have been advised by our counsel that no gain or loss should be recognized
by you for federal income tax purposes as a result of the recapitalization,
except with respect to any cash received in lieu of fractional shares. However,
the Internal Revenue Service could disagree. There are no court decisions or
other authorities bearing directly on transactions similar to the
recapitalization proposal. In addition, the Internal Revenue Service has
announced that it will not issue rulings on the characterization of stock with
characteristics similar to the SNC stock and the circle.com stock. Therefore,
the tax treatment of the recapitalization is subject to some uncertainty.

Clinton Administration Proposal

A recent proposal by the Clinton Administration would impose a corporate
level tax on the issuance of stock similar to the SNC stock or the circle.com
stock. If this proposal is enacted, we could be subject to tax on an issuance
of SNC stock or circle.com stock after the date of enactment. If our
stockholders approve the recapitalization proposal, our board of directors
currently intends to implement the proposal, subject to further legislative
developments relating to the Clinton Administration tax proposal.

No Dissenters' Rights

You will not have dissenters' or appraisal rights under Delaware law if the
recapitalization proposal is implemented.

10
<PAGE>

No Regulatory Approvals

No state or federal regulatory approvals are required for the
recapitalization proposal.

Proposal 2--Adoption of our Amended and Restated Stock Incentive Plan (page
105)

The proposal relates to the adoption of our amended and restated stock
incentive plan to provide for the granting of stock awards and options in SNC
stock and circle.com stock. The terms of the amended plan are the same in all
material respects as our existing stock incentive plan except both classes of
common stock may be issued under the amended plan and the total number of
shares available for issuance under the plan has been increased.

On June 22, 1999, our board of directors adopted the amended and restated
stock incentive plan. We believe the amended stock incentive plan will promote
the interests of Snyder Communications, each group and our stockholders by
helping to attract and retain exceptional employees, officers and directors.
The amended stock incentive plan will motivate participants by means of stock
options, stock appreciation rights and restricted shares to achieve long-term
performance goals, and enable our employees, officers, directors and
consultants to participate in our long-term growth and financial success.

Proposal 3--Adoption of our Amended and Restated Employee Stock Purchase Plan
(page 113)

The proposal relates to the adoption of our amended and restated employee
stock purchase plan to permit employees to purchase shares of both SNC stock
and circle.com stock at a discount. The terms of the amended plan are the same
in all material respects as our existing stock purchase plan except that both
classes of common stock may be purchased under the amended plan.

On June 22, 1999, our board of directors adopted the amended and restated
stock purchase plan. The amended stock plan is designed to permit our employees
to purchase both SNC stock and circle.com stock at a discount under the stock
purchase plan. We believe the amended stock purchase plan will promote the
interests of Snyder Communications, each group and our stockholders by
encouraging employee participation in the ownership of Snyder Communications.

Recommendation of the Board of Directors

Our board of directors has carefully considered each of these proposals and
believes that the approval of these proposals by the stockholders is advisable
and in the best interests of our company and our stockholders. Our board of
directors unanimously recommends that you approve each of these proposals.

11
<PAGE>

SNYDER COMMUNICATIONS, INC.

SELECTED FINANCIAL DATA
(in thousands, except per share data)

The following table summarizes certain historical financial data with respect
to Snyder Communications and is qualified in its entirety by reference to, and
should be read in conjunction with, the Snyder Communications historical
financial statements and related notes included elsewhere in this proxy
statement and prospectus. The historical financial data for the years ended
December 31, 1998, 1997 and 1996 have been derived from the audited financial
statements of Snyder Communications. Historical financial information may not
be indicative of Snyder Communications' future performance. See also "Snyder
Communications--Management's Discussion and Analysis of Financial Condition and
Results of Operations."

<TABLE>
<CAPTION>
For the Three
Months
Ended March 31, For the Years Ended December 31,
----------------- ----------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- ----------- -----------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Net Revenues........... $138,081 $109,584 $493,803 $403,072 $349,223 $286,435 $195,834
======== ======== ======== ======== ======== ======== ========
Income (loss) from
continuing
operations............ $ 13,826 $ (4,576) $ 21,360 $(16,636) $ 15,481 $ 19,425 $ 8,641
======== ======== ======== ======== ======== ======== ========
Income (loss) from
discontinued
operations(1)......... $ 5,089 $ (4,052) $ 1,446 $(10,225) $ (1,415) $ 6,930 $ 3,806
======== ======== ======== ======== ======== ======== ========
Extraordinary item(2).. $ -- $ -- $ -- $ -- $ (1,216) $ -- $ --
======== ======== ======== ======== ======== ======== ========
Net income (loss)...... $ 18,915 $ (8,628) $ 22,806 $(26,861) $ 12,850 $ 26,355 $ 12,447
======== ======== ======== ======== ======== ======== ========
Historical net income
(loss) per share:
Diluted net income
(loss) per share:
Continuing operations.. $ 0.19 $ (0.07) $ 0.31 $ (0.26) $ 0.26 $ 0.33 $ 0.15
Discontinued
operations............ 0.07 (0.06) 0.02 (0.16) (0.02) 0.12 0.07
Extraordinary item..... -- -- -- -- (0.02) -- --
-------- -------- -------- -------- -------- -------- --------
Total Diluted net
income (loss) per
share................. $ 0.26 $ (0.13) $ 0.33 $ (0.42) $ 0.22 $ 0.45 $ 0.22
======== ======== ======== ======== ======== ======== ========
Unaudited:
Pro forma net income
(loss) from continuing
operations(3)......... $ 13,826 $ (6,572) $ 18,699 $(19,191) $ 11,398 $ 23,575 $ 12,409
======== ======== ======== ======== ======== ======== ========
Pro forma diluted net
income (loss) from
continuing operations
per share(3)(5)....... $ 0.19 $ (0.10) $ 0.26 $ (0.30) $ 0.19 $ 0.40 $ 0.22
======== ======== ======== ======== ======== ======== ========
Pro forma net income
from continuing
operations, excluding
nonrecurring
items(4).............. $ 14,366 $ 9,277 $ 48,609 $ 21,412 $ 17,801 $ 23,575 $ 12,409
======== ======== ======== ======== ======== ======== ========
Pro forma diluted net
income from continuing
operations excluding
nonrecurring items per
share(4)(5)........... $ 0.19 $ 0.13 $ 0.68 $ 0.33 $ 0.30 $ 0.40 $ 0.22
======== ======== ======== ======== ======== ======== ========
Shares used in computing
per share amounts(5):
Basic.................. 71,889 67,747 69,587 63,752 59,194 58,812 56,243
Diluted................ 73,703 67,747 72,012 63,752 59,992 58,903 56,243
Balance Sheet Data:
Total assets........... $738,368 $613,252 $382,137 $273,728 $193,928 $173,857
======== ======== ======== ======== ======== ========
Long-term debt......... $ 11,638 $ 12,283 $ 12,856 $ 36,028 $ 37,059 $ 27,240
======== ======== ======== ======== ======== ========
Redeemable ESOP
stock(6).............. $ 2,425 $ 2,960 $ 5,278 $ 2,452 $ 269 $ --
======== ======== ======== ======== ======== ========
Total equity........... $468,292 $357,378 $118,261 $ 67,123 $ 36,044 $ 22,851
======== ======== ======== ======== ======== ========
</TABLE>
- --------
(footnotes on next page)

12
<PAGE>

(footnotes continued from previous page)

(1) Income (loss) from discontinued operations includes the income (loss) from
discontinued operations of the healthcare services business for the three
months ended March 31, 1999 and 1998 and the years ended December 31, 1998,
1997, 1996, 1995 and 1994, which will be spun off to stockholders of record
of Snyder Communications on a date to be determined. The income (loss) of
discontinued operations for the years ended December 31, 1997 and 1996 also
includes the loss from discontinued operations of Bob Woolf Associates,
Inc., which was spun off to stockholders of one of Snyder Communications'
1998 acquisitions on October 31, 1997.
(2) Net income for the year ended December 31, 1996 includes an extraordinary
item of $1.2 million that was recorded in conjunction with the early
redemption of subordinated debentures which were due to related parties.
The extraordinary item is net of a $0.8 million tax benefit and consists of
prepayment of penalties and the write-off of unamortized discount and debt
issuance costs.
(3) Prior to their respective acquisitions, certain U.S.-based acquirees were
not subject to federal or state income taxes. Pro forma net income from
continuing operations represents income from continuing operations adjusted
to reflect a provision for income taxes as if Snyder Communications had
been taxed similarly to a C corporation for all periods presented.
(4) Pro forma net income from continuing operations, excluding nonrecurring
items represents income from continuing operations adjusted to reflect a
provision for income taxes as if Snyder Communications had been taxed
similarly to a C corporation for all periods presented and the elimination
of compensation to stockholders, ESOP expense and acquisition and related
costs. Compensation to stockholders, ESOP expense and acquisition and
related costs are considered to be nonrecurring by Snyder Communications
because its current operations will not result in any compensation to
stockholders, ESOP expense or acquisition costs in future periods.
(5) The shares used in computing the per share amounts assume that the pooling
transactions had occured at the beginning of each of the periods presented
and reflect the issuance of additional shares of Snyder Communications in
public offerings, the impact of stock options, and certain share
repurchases.
(6) Represents the balance necessary to satisfy the repurchase obligation
associated with Snyder Communications' shares held by the ESOP of an
acquired company which have been allocated to former employees of the
acquired company whose employment had terminated prior to its merger with
Snyder Communications.

13
<PAGE>

SNC

SELECTED FINANCIAL DATA
(in thousands, except per share data)

The following table summarizes certain historical financial data with respect
to SNC and is qualified in its entirety by reference to, and should be read in
conjunction with, the SNC historical financial statements and related notes
included elsewhere in this proxy statement and prospectus. The historical
financial data for the years ended December 31, 1998, 1997 and 1996 have been
derived from the audited combined financial statements of SNC. Historical
financial information may not be indicative of SNC's future performance. See
also "SNC--Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "SNC--Business."

<TABLE>
<CAPTION>
For the Three
Months Ended
March 31, For the Years Ended December 31,
----------------- -----------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
-------- -------- -------- --------- -------- ----------- -----------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Net Revenues........... $132,955 $107,841 $480,289 $ 397,505 $345,915 $286,435 $195,834
======== ======== ======== ========= ======== ======== ========
Income (loss) from
continuing
operations............ $ 14,589 $ (4,286) $ 21,362 $ (16,522) $ 15,691 $ 19,425 $ 8,641
======== ======== ======== ========= ======== ======== ========
Income (loss) from
discontinued
operations (1)........ $ 5,089 $ (4,052) $ 1,446 $ (10,225) $ (1,415) $ 6,930 $ 3,806
======== ======== ======== ========= ======== ======== ========
Extraordinary item
(2)................... $ -- $ -- $ -- $ -- $ (1,216) $ -- $ --
======== ======== ======== ========= ======== ======== ========
Net income (loss)...... $ 19,678 $ (8,338) $ 22,808 $ (26,747) $ 13,060 $ 26,355 $ 12,447
======== ======== ======== ========= ======== ======== ========
Unaudited:
Pro forma historical
net income (loss) per
share (5):
Basic and diluted net
income (loss) per
share:
Continuing
operations.......... $ 0.19 $ (0.06) $ 0.28 $ (0.22) $ 0.21 $ 0.26 $ 0.11
Discontinued
operations.......... $ 0.07 $ (0.05) $ 0.02 $ (0.13) $ (0.02) $ 0.09 $ 0.05
Extraordinary item... $ -- $ -- $ -- $ -- $ (0.02) $ -- $ --
-------- -------- -------- --------- -------- -------- --------
Total basic and
diluted pro forma
historical net income
(loss) per share...... $ 0.26 $ (0.11) $ 0.30 $ (0.35) $ 0.17 $ 0.35 $ 0.16
======== ======== ======== ========= ======== ======== ========
Pro forma adjusted net
income (loss) from
continuing operations
(3)................... $ 14,589 $(6,407) $ 18,576 $(18,466) $ 11,915 $ 23,575 $ 12,409
======== ======== ======== ========= ======== ======== ========
Pro forma adjusted
basic and diluted net
income (loss) from
continuing operations
per share (3)(5)...... $ 0.19 $( 0.08) $ 0.25 $ (0.24) $ 0.16 $ 0.31 $ 0.16
======== ======== ======== ========= ======== ======== ========
Pro forma adjusted net
income from
continuing
operations, excluding
nonrecurring
items (4)............. $ 15,129 $ 9,444 $ 48,489 $ 21,996 $ 18,247 $ 23,575 $ 12,409
======== ======== ======== ========= ======== ======== ========
Pro forma adjusted
basic and diluted net
income from
continuing operations
excluding
nonrecurring items
per share (4)(5)...... $ 0.20 $ 0.12 $ 0.64 $ 0.29 $ 0.24 $ 0.31 $ 0.16
======== ======== ======== ========= ======== ======== ========
Shares used in computing
basic and diluted per
share amounts (5):..... 75,581 75,581 75,581 75,581 75,581 75,581 75,581
======== ======== ======== ========= ======== ======== ========
Balance Sheet Data:
Total assets........... $725,186 $600,340 $ 379,528 $272,441 $193,928 $173,857
======== ======== ========= ======== ======== ========
Long-term debt......... $ 11,638 $ 12,283 $ 12,856 $ 36,028 $ 37,059 $ 27,240
======== ======== ========= ======== ======== ========
Redeemable ESOP stock
(6)................... $ 2,425 $ 2,960 $ 5,278 $ 2,452 $ 269 $ --
======== ======== ========= ======== ======== ========
Total investments and
advances from Snyder
Communications ....... $458,622 $349,017 $ 117,036 $ 66,507 $ 36,044 $ 22,851
======== ======== ========= ======== ======== ========
</TABLE>
- --------
(footnotes on next page)

14
<PAGE>

(footnotes continued from previous page)

(1) Income (loss) from discontinued operations includes the income (loss) from
discontinued operations of the healthcare services business for the three
months ended March 31, 1999 and 1998 and the years ended December 31, 1998,
1997, 1996 1995 and 1994, which will be spun off to stockholders of record
of Snyder Communications on a date to be determined. The income (loss) from
discontinued operations for the years ended December 31, 1997 and 1996 also
includes the loss from discontinued operations of Bob Woolf Associates,
Inc., which was spun off to stockholders of one of Snyder Communications'
1998 acquisitions on October 31, 1997.
(2) Net income for the year ended December 31, 1996 includes an extraordinary
item of $1.2 million that was recorded in conjunction with the early
redemption of subordinated debentures which were due to related parties.
The extraordinary item is net of a $0.8 million tax benefit and consists of
prepayment of penalties and the write-off of unamortized discount and debt
issuance costs.
(3) Prior to their respective acquisitions, certain of the U.S.-based acquirees
were not subject to federal or state income taxes. Pro forma adjusted net
income from continuing operations represents income from continuing
operations adjusted to reflect a provision for income taxes as if SNC had
been taxed similarly to a C corporation for all periods presented.
(4) Pro forma net income from continuing operations, excluding nonrecurring
items represents income from continuing operations adjusted to reflect a
provision for income taxes as if SNC had been taxed similarly to a C
corporation for all periods presented and the elimination of compensation
to stockholders, ESOP expense and acquisition and related costs.
Compensation to stockholders, ESOP expense and acquisition and related
costs are considered to be nonrecurring by SNC because SNC's current
operations will not result in any compensation to stockholders, ESOP
expense or acquisition costs in future periods.
(5) For all periods presented, basic EPS has been computed using the SNC shares
that will be issued upon the recapitalization. Basic and diluted EPS are
the same for all years presented as there will be no SNC options granted
until the recapitalization.
(6) Represents the balance necessary to satisfy the repurchase obligation
associated with Snyder Communications' shares held by the ESOP of an
acquired company which have been allocated to former employees of the
acquired company whose employment had terminated prior to its merger with
SNC.

15
<PAGE>

CIRCLE.COM

SELECTED FINANCIAL DATA(/1/)
(in thousands, except per share data)

The following table summarizes certain historical financial data with respect
to circle.com and is qualified in its entirety by reference to, and should be
read in conjunction with, the circle.com historical financial statements and
related notes included elsewhere in this proxy statement and prospectus. The
historical financial data for the years ended December 31, 1998, 1997 and 1996
have been derived from the audited combined financial statements of circle.com.
Historical financial information may not be indicative of circle.com's future
performance. See also "Circle.com--Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Circle.com--Business."

<TABLE>
<CAPTION>
For the Three Months For the Years Ended
Ended March 31, December 31,
---------------------- -----------------------
1999 1998 1998 1997 1996
---------- ---------- ------- ------ ------
(unaudited)
<S> <C> <C> <C> <C> <C>
Income Statement Data (1):
Net revenues................. $ 5,349 $ 1,743 $13,514 $5,567 $3,308
Operating expenses:
Professional services....... 3,222 921 7,114 3,044 1,960
Office and general.......... 3,312 1,150 5,902 3,621 2,176
---------- --------- ------- ------ ------
Income (loss) before income
taxes....................... (1,185) (328) 498 (1,098) (828)
Income tax provision
(benefit)................... (314) 4 500 (968) (588)
---------- --------- ------- ------ ------
Net loss..................... (871) (332) (2) (130) (240)
---------- --------- ------- ------ ------
Net loss attributable to SNC
retained interest........... (174) (66) -- (26) (48)
---------- --------- ------- ------ ------
Net loss attributable to
circle.com outstanding
shares...................... $ (697) $ (266) $ (2) $ (104) $ (192)
========== ========= ======= ====== ======
Pro forma historical net loss
per share (unaudited) (3):
Basic and diluted net income
(loss) per share........... $ (.04) $ (.01) $ -- $ (.01) $ (.01)
========== ========= ======= ====== ======
Pro forma adjusted net income (loss) per
share
(unaudited) (2)(3):
Basic and diluted net income
(loss) per share........... $ (.04) $ (.01) $ .01 $ (.03) $ (.02)
========== ========= ======= ====== ======
Shares used in computing net
income (loss) per share (3)... 18,895 18,895 18,895 18,895 18,895
========== ========= ======= ====== ======
Balance Sheet Data:
Total assets................. $ 15,646 $15,042 $2,932 $1,441
========== ======= ====== ======
Investments and advances from
Snyder Communications, net.. $ 12,088 $10,451 $1,531 $ 770
========== ======= ====== ======
</TABLE>
- --------
(1) There were no operations of circle.com prior to 1996.
(2) Pro forma adjusted data are calculated as if circle.com had been taxed
similarly to a C corporation for all periods presented. The operations of
circle.com were contained within the BrannWorldwide and Arnold
Communications networks of Snyder Communications until May 1999 when they
were coordinated under the name circle.com and placed under the
responsibility of a single management team. Certain of the operations of
circle.com were not subject to federal or state income taxes prior to their
respective acquisitions by Snyder Communications.
(3) For all periods presented, basic EPS has been computed using the circle.com
shares that will be issued upon the recapitalization. Basic and diluted EPS
are the same for all years presented as there will be no circle.com options
granted until the recapitalization.

16
<PAGE>

RISK FACTORS

In deciding whether to vote for the recapitalization proposal, you should
take into account the following risk factors, as well as other risks included
under "Special Note Regarding Forward-Looking Statements" and elsewhere in
this proxy statement and prospectus or incorporated by reference in this proxy
statement and prospectus.

The risk factors included through page 22 discuss risks arising from a
capital structure with two separate classes of common stock. Beginning on page
23, we discuss risks which are common to both groups. Beginning on page 26, we
discuss risks which are specific to circle.com.

You will remain stockholders of one company and, therefore, financial effects
on one group could adversely affect the other.

Holders of SNC stock and circle.com stock will be stockholders of a single
company. SNC and circle.com will not be separate legal entities, but rather
parts of Snyder Communications. As a result, stockholders will continue to be
subject to all of the risks of an investment in Snyder Communications and all
of our businesses, assets and liabilities. The issuance of the SNC stock and
the circle.com stock and the allocation of assets, liabilities and
stockholders' equity between SNC and circle.com will not result in a
distribution or spin-off to stockholders of any of our assets or liabilities.
It also will not affect ownership of our assets or responsibility for our
liabilities or those of our subsidiaries. The assets we attribute to one group
could be subject to the liabilities of the other group, whether such
liabilities arise from lawsuits, contracts or indebtedness that we attribute
to the other group. If we are unable to satisfy one group's liabilities out of
the assets we attribute to that group, we may be required to satisfy those
liabilities with assets we have attributed to the other group.

Financial effects from one group that affect our consolidated results of
operations or financial condition could, if significant, affect the results of
operations or financial condition of the other group and the market price of
the common stock relating to the other group. In addition, net losses of
either group and dividends and distributions on, or repurchases of, either
class of common stock or repurchases of any outstanding preferred stock at a
price per share greater than par value will reduce the funds we can pay on
each class of common stock under Delaware law. For these reasons, you should
read our consolidated financial information along with the financial
information we provide for each group.

Holders of each class of common stock will have limited rights related to
their group.

Holders of SNC stock or circle.com stock generally will not have stockholder
rights specific to their corresponding groups. Instead, holders will have
customary stockholder rights relating to Snyder Communications as a whole. For
example, holders of SNC stock and circle.com stock would vote as a single
class to approve a disposition of all or substantially all of the assets of
Snyder Communications. Holders of either class of common stock will only have
the following rights with respect to their particular group:

. an opportunity to receive dividends declared by our board of directors
based on the available dividend amount for their group;

. in the case of circle.com stock, requirements for a mandatory dividend,
redemption or conversion upon the disposition of all or substantially
all of the assets of their group; and

. a right to vote on matters as a separate voting class in the
circumstances described under "Proposal 1--The Recapitalization
Proposal--Description of SNC Stock and circle.com Stock--Voting Rights."

17
<PAGE>

Limits exist on voting power of group stock.

Holders of circle.com stock may not initially have any influence on the
outcome of stockholder voting.

We expect that initially the SNC stock will have a substantial majority of
the combined voting power of the common stocks. Except in limited circumstances
requiring separate class voting, the class of common stock that is entitled to
more than the number of votes required to approve any stockholder action could
control the outcome of a vote--even if the matter involves a divergence or
conflict of the interests of the holders of the SNC stock and the circle.com
stock. These matters may include mergers and other extraordinary transactions.

The class of common stock with less than majority voting power can block
action if a class vote is required.

If Delaware law, stock exchange rules or our board of directors requires a
separate vote on a matter by the holders of either the SNC stock or the
circle.com stock, those holders could prevent approval of the matter--even if
the holders of a majority of the total number of votes cast or entitled to be
cast, voting together as a class, were to vote in favor of it.

Holders of only one class of common stock cannot ensure that their voting
power will be sufficient to protect their interests.

Since the relative voting power per share of SNC stock and circle.com stock
will fluctuate based on the market values of the two classes of common stock,
the relative voting power of a class of common stock could decrease. As a
result, holders of shares of only one of the two classes of common stock cannot
ensure that their voting power will be sufficient to protect their interests.

Stockholders may not have any remedies for breach of fiduciary duties if any
action by directors or officers has a disadvantageous effect on either class of
common stock.

Stockholders may not have any remedies if any action or decision of our
directors or officers has a disadvantageous effect on either the SNC stock or
the circle.com stock as compared to the other class of common stock. There is
limited legal precedent under Delaware law involving the fiduciary duties of
directors and officers of corporations having two classes of common stock, or
separate classes or series of capital stock, the rights of which, like the SNC
stock and the circle.com stock, are defined by reference to separate businesses
of the corporation.

Principles of Delaware law established in cases involving differing treatment
of two classes of capital stock or two groups of holders of the same class of
capital stock provide that a board of directors owes an equal duty to all
stockholders regardless of class or series. Under these principles of Delaware
law and the related principle known as the "business judgment rule," absent
abuse of discretion, a good faith business decision made by a disinterested and
adequately informed board of directors, board of directors' committee or
officer with respect to any matter having different effects on holders of SNC
stock and holders of circle.com stock would be a defense to any challenge to
the business decision made by or on behalf of the holders of either class of
common stock.

Stock ownership could cause directors and officers to favor one group over the
other.

We expect that our directors and officers will initially own shares of SNC
stock having a significantly greater value than the shares of circle.com stock
that they own. As a policy, our board of directors will periodically monitor
the ownership of shares of SNC stock and shares of circle.com stock by our
directors and senior officers and our option grants to them so that their
interests are generally aligned with the two classes of common stock and with
their duty to act in the best interests of Snyder Communications and our
stockholders as a whole. However, because the actual value of their interests
in the SNC stock and circle.com stock is anticipated to vary significantly, it
is possible that they could favor one group over the other due to their stock

18
<PAGE>

and option holdings. See "Proposal 1--The Recapitalization Proposal--Management
and Allocation Policies--Common Stock Ownership of Directors and Senior
Officers."

Numerous potential conflicts of interest exist between the classes of common
stock which may be difficult to resolve by our board or which may be resolved
adversely to one of the classes.

Our board of directors may pay more or less dividends on one group's common
stock than if that group was a separate company.

Subject to the limitations referred to below, our board of directors has the
authority to declare and pay dividends on the SNC stock and the circle.com
stock in any amount. Our board of directors could, in its sole discretion,
declare and pay dividends exclusively on the SNC stock, exclusively on the
circle.com stock, or on both, in equal or unequal amounts. Our board of
directors will not be required to consider the amount of dividends previously
declared on each class, the respective voting or liquidation rights of each
class or any other factor. The performance of one group may cause our board of
directors to pay more or less dividends on the common stock relating to the
other group than if that other group was a stand-alone corporation. In
addition, Delaware law and the amended and restated certificate of
incorporation impose limitations on the amount of dividends which may be paid
on each class of common stock. For additional information on these limitations,
see "Proposal 1--The Recapitalization Proposal--Dividend Policy" and "--
Description of SNC Stock and circle.com Stock--Dividends."

Our board of directors has sole discretion to allocate proceeds upon
issuances or costs of repurchases of circle.com stock to circle.com or SNC.

Proceeds from the issuance of circle.com stock may not necessarily be
allocated to the equity of circle.com. Our board of directors will determine in
its sole discretion whether to allocate the proceeds of issuances or costs of
repurchases of circle.com stock to SNC in respect of its retained interest in
circle.com or to the equity of circle.com. For a more complete description of
how our board of directors will allocate cash between SNC and circle.com, see
"Proposal 1--The Recapitalization Proposal--Management and Allocation
Policies--Financing Activities."

Stockholders will not vote on how to allocate consideration received in
connection with a merger among holders of SNC stock and holders of
circle.com stock.

Our amended and restated certificate of incorporation will not contain any
provisions governing how consideration received in connection with a merger or
consolidation involving Snyder Communications is to be allocated between
holders of SNC stock and holders of circle.com stock. Neither holders of SNC
stock nor holders of circle.com stock will have a separate class vote in any
merger or consolidation so long as we divide the type and amount of
consideration between holders of SNC stock and holders of circle.com stock in a
manner we determine, in our sole discretion, to be fair. In any merger or
consolidation, the different ways we may divide the consideration might have
materially different results. As a result, the consideration to be received by
holders of SNC stock or circle.com stock in any merger or consolidation may be
materially less valuable than the consideration they would have received if
they had a separate class vote on the merger or consolidation.

Holders of either class of common stock may be adversely affected by a
conversion of one group's stock.

Our board of directors could, in its sole discretion and without stockholder
approval, determine to convert shares of SNC stock into shares of circle.com
stock, or to convert shares of circle.com stock into shares of SNC stock, at
any time including when either or both classes of common stock may be
considered to be overvalued or undervalued. Any conversion at a premium would
dilute the interests in Snyder Communications for the holders of the class of
common stock being issued in the conversion. Any conversion would also preclude
holders of both classes of common stock from retaining their investment in a
security that is intended to reflect separately the performance of the relevant
group. It would also give holders of shares of the class of

19
<PAGE>

common stock converted a greater or lesser premium than any premium that was
paid or might be paid by a third-party buyer of all or substantially all of the
assets of the group whose stock is converted. For additional information on the
terms and conditions of a conversion of one class of common stock into the
other, see "Proposal 1--The Recapitalization Proposal--Description of SNC Stock
and circle.com Stock--Conversion of circle.com Stock or SNC Stock at Our Option
at Any Time."

Allocation of corporate opportunities could favor one group over the other.

Our board of directors may be required to allocate corporate opportunities
between the groups. In some cases, our directors could determine that a
corporate opportunity, such as a business that we are acquiring, should be
shared by the groups. These decisions could favor one group at the expense of
the other. For additional information on the factors affecting these decisions,
see "Proposal 1--The Recapitalization Proposal--Management and Allocation
Policies--Review of Corporate Opportunities."

Groups may compete with each other to the detriment of their businesses.

The creation of two separate classes of common stock will not prevent the
groups from competing with each other. Any competition between the groups could
be detrimental to the businesses of either or both of the groups. As a matter
of board policy, neither SNC nor circle.com will engage in the principal
businesses of the other, except for joint transactions with each other and
third parties. However, our chief executive officer or our board of directors
will permit indirect competition between the groups based on his or its good
faith business judgment that competition is in the best interests of our
company and all of our stockholders as a whole. In addition, the groups may
compete in a business that is not a principal business of the other group. For
additional information on our policy regarding competition, see "Proposal 1--
The Recapitalization Proposal--Management and Allocation Policies--Competition
Between Groups."

Our board of directors may change our management and allocation policies
without stockholder approval to the detriment of either group.

Our board of directors may modify or rescind our policies with respect to the
allocation of corporate overhead, taxes, debt, interest and other matters, or
may adopt additional policies, in its sole discretion, without stockholder
approval. A decision to modify or rescind these policies, or adopt additional
policies, could have different effects on holders of SNC stock and holders of
circle.com stock or could adversely affect one class of stockholders as
compared to the other class. For example, our board of directors could modify
the policy regarding competition between the groups to prohibit indirect
competition altogether or to prohibit the provision of services between the
groups. Our board of directors will make any decision relating to these matters
in its good faith business judgment that the decision is in the best interests
of our company and all of our stockholders as a whole. We cannot assure you
that the policies determined by our board of directors are as favorable or more
favorable to the holders of SNC stock and holders of circle.com stock than
policies that would be set by either group if it were a separate company.

Either group may finance the other group on terms unfavorable to one of the
groups.

We anticipate that we will transfer cash and other property between groups to
finance their business activities. The group providing the financing will be
subject to the risks relating to the group receiving the financing. We will
account for those transfers in one of the following ways:

. as a reallocation of "pooled" debt;

. as a short-term or long-term loan between groups or as a repayment of a
previous borrowing;

. as an increase or decrease in SNC's retained interest in circle.com; or

. as a sale of assets between groups.

20
<PAGE>

Our board of directors has not adopted specific criteria to determine
whether a particular transfer of cash or property from one group to the other
will be accounted for as a reallocation of "pooled" debt, a short-term or
long-term loan, an increase or decrease in equity interest or a sale of
assets. These determinations, including the terms of any transactions
accounted for as a loan, could be unfavorable to either group. For example, we
cannot assure you that any terms that we fix for debt will approximate those
that could have been obtained by the borrowing group if it were a stand-alone
corporation. Our board of directors expects to make these determinations,
either in specific instances or by setting generally applicable policies,
after considering the financing requirements and objectives of the receiving
group, the investment objectives of the transferring group and the
availability, cost and time associated with alternative financing sources,
prevailing interest rates and general economic conditions. For additional
information on the financing of the groups' operations, see "Proposal 1--The
Recapitalization Proposal--Management and Allocation Policies--Financing
Activities."

Holders of circle.com stock may receive less consideration upon a sale of
assets than if circle.com were a separate company.

The amended and restated certificate of incorporation provides that if we
dispose of all or substantially all of the assets of circle.com, we must,
subject to certain exceptions:

. pay a dividend to holders of circle.com stock in an amount equal to a
proportionate interest in the net proceeds of the disposition;

. redeem from holders of circle.com stock, for an amount equal to a
proportionate interest in the net proceeds of the disposition,
outstanding shares of circle.com stock; or

. issue SNC stock in exchange for outstanding circle.com stock at a 10%
premium to the value of the circle.com stock being exchanged.

If circle.com was a separate, independent company and its shares were
acquired by another person, certain costs of that disposition, including
corporate level taxes, might not be payable in connection with that
acquisition. As a result, stockholders of the separate, independent company
might receive a greater amount of the net proceeds that would be received by
holders of circle.com stock. In addition, we can not assure you that the net
proceeds per share of circle.com stock will be equal to or more than the
market value per share of the circle.com stock prior to or after announcement
of a disposition. For additional information on the terms and conditions of a
conversion upon a disposition of assets of circle.com, see "Proposal 1--The
Recapitalization Proposal--Description of SNC Stock and circle.com Stock--
Mandatory Dividend, Redemption or Exchange on Disposition of All or
Substantially All of the Assets of circle.com."

It might be possible for an acquiror to obtain control of Snyder
Communications by purchasing shares of only one of the classes of common
stock.

A potential acquiror could acquire control of Snyder Communications by
acquiring shares of common stock having a majority of the voting power of all
shares of common stock outstanding. A majority could be obtained by acquiring
a sufficient number of shares of both classes of common stock or, if one class
of common stock has a majority of the voting power, only shares of that class.
We expect that initially the SNC stock will have a substantial majority of the
voting power. As a result, initially, it might be possible for an acquiror to
obtain control of Snyder Communications by purchasing only shares of SNC
stock.

Decisions by directors and officers that affect market values could adversely
affect voting and conversion rights.

The relative voting power per share of each class of common stock and the
number of shares of one class of common stock issuable upon the conversion of
the other class of common stock will vary depending upon the relative market
values of SNC stock and circle.com stock. The market value of either or both
classes of

21
<PAGE>

common stock could be adversely affected by market reaction to decisions by our
board of directors or our management that investors perceive to affect
differently one class of common stock compared to the other. These decisions
could involve changes to our management and allocation policies, transfers of
assets between groups, allocations of corporate opportunities and financing
resources between groups and changes in dividend policies.

Market value of the stock received in the recapitalization may be less than the
market value of existing common stock.

We can not assure you that the combined market values of a share of SNC stock
and of .25 of a share of circle.com stock received in the recapitalization will
equal or exceed the market value of a share of our existing common stock prior
to the recapitalization.

Market price of common stock not included in stock market indices could
decline.

We do not anticipate that the circle.com stock initially will be included in
any stock index. As a result, holders of our existing common stock that are
required to own only stocks included in an index would be required to sell
immediately the circle.com stock received by them in the recapitalization.
Further, we cannot assure you that the SNC stock will continue to be included
in any particular index. Not being included in a particular index in the case
of SNC stock or any index in the case of circle.com stock could adversely
affect the market price of that class of common stock.

Provisions governing common stock could discourage a change of control and the
payment of a premium for shares.

The existence of two classes of common stock could present complexities and
could pose obstacles, financial and otherwise, to an acquiring person. In
addition, provisions of Delaware law, our amended and restated certificate of
incorporation and our by-laws may also deter hostile takeover attempts. For
additional information on these provisions, see "Proposal 1--The
Recapitalization Proposal--Certain Anti-Takeover Provisions of Delaware Law and
the Amended and Restated Certificate of Incorporation and By-Laws."

The IRS could assert that the receipt of a class of common stock is taxable.

We have been advised by our counsel that no income, gain or loss should be
recognized by you or us for federal income tax purposes as a result of the
recapitalization proposal, except for any cash received instead of fractional
shares of circle.com stock. However, the Internal Revenue Service could
disagree. There are no court decisions or other authorities bearing directly on
the effect of the features of the SNC stock and the circle.com stock. In
addition, the Internal Revenue Service has announced that it will not issue
rulings on the characterization of stock with characteristics similar to the
SNC stock and the circle.com stock. It is possible, therefore, that the
Internal Revenue Service could successfully assert that the receipt of the SNC
stock or the circle.com stock could be taxable to you and to us and that the
subsequent conversion of one common stock into the other could be taxable to
you.

A recent Clinton Administration proposal could result in taxation on issuances
of common stock.

A recent proposal by the Clinton Administration would impose a corporate
level tax on the issuance of stock similar to the SNC stock or the circle.com
stock. If this proposal is enacted, we could be subject to tax on an issuance
of SNC stock or circle.com stock after the date of enactment. If our
stockholders approve the recapitalization proposal, our board of directors
currently intends to implement the recapitalization, subject to further
legislative developments relating to the Clinton Administration tax proposal.

22
<PAGE>

implemented or proposed to be implemented by an applicable federal legislative
committee or its chair. For additional information on the events that could
cause us to effect a conversion, see "Proposal 1--The Recapitalization
Proposal--Description of SNC Stock and circle.com Stock--Conversion of
circle.com Stock or SNC Stock at Our Option at Any Time" and "--Material
Federal Income Tax Consequences."

Risk Factors Relating to Both Groups

The continued growth of SNC and circle.com may further strain our resources,
which could adversely affect the business and results of operations of
either group.

Our rapid growth has strained our managerial and operational resources. Our
continued, planned growth is a key component of increasing the value of both
the SNC stock and the circle.com stock. In the past two years our business has
grown significantly, and we anticipate continued internal growth.

We cannot assure you that our management will be able to manage our growth
effectively. In order to do so, we must implement and improve our operational
systems, procedures and controls. If our systems, procedures and controls are
not adequate to support our operations, the expansion of the businesses of
either group could be adversely affected. Any inability to expand effectively
could have a material adverse effect on the business, financial condition and
results of operations of either group.

Our growth could also be adversely affected by many other factors, including
economic downturns, as clients could reduce or delay their expenditures for the
services we offer. As a result of these concerns, we cannot be sure that either
or both groups will continue to grow, or, if they do grow, that they will be
able to maintain their respective historical growth rates.

We may have problems with our international operations, which could adversely
affect our business and results of operations.

We have a number of operations in the United Kingdom and continental Europe.
There are many risks inherent in conducting international business, including:

. difficulties in complying with a variety of foreign laws;

. difficulties in staffing and managing foreign operations, including
distance, cultural and language problems; and

. potential political and economic instability.

In addition, foreign exchange rate fluctuations may have an adverse effect on
our results of operations. Approximately 31.8% and 16.8% of the revenues of SNC
and circle.com, respectively, in 1998 were from outside the United States. The
majority of these revenues were denominated in British pounds. The U.S. dollar
value of our revenues varies with currency exchange rate fluctuations.
Significant increases in the value of the U.S. dollar relative to the British
pound could have a material adverse effect on our results of operations. We
continually evaluate our exposure to exchange rate risk, but do not currently
hedge this risk.

Both SNC and circle.com rely on a small number of clients for a significant
portion of their respective revenues. If either group loses a major client
or project, its revenues could be adversely affected.

The ten largest current clients of SNC, based on revenues for the year ended
December 31, 1998, listed alphabetically, are Bell Atlantic, Bose, British
Telecom, Eastern National Gas, Fleet Financial Group, GTE, IBM, McDonalds,
Procter & Gamble and Volkswagen of America. These clients accounted for 36.4%
of the revenues of SNC for the year ended December 31, 1998. The ten largest
current clients of circle.com, based on revenues for the year ended December
31, 1998, listed alphabetically, are Bell Atlantic, Bermuda Department of
Tourism, Healthcare Financing Administration, IBM, Merck, Mobil, Peugeot, SAP,
ServiceMaster and United Parcel Service. These clients accounted for 71.1% of
the revenues of circle.com for the year ended December 31, 1998. No single
client of SNC or circle.com accounted for more than 10% and 14% of its revenues
in 1998, respectively.

23
<PAGE>

Both groups provide services to many of their most significant clients under
multi-year contracts. However, as is typical in the industries in which each
group operates, clients may cancel these multi-year contracts on specified
notice periods. As a result, we cannot assure you that the most significant
clients of either group will continue to do business with that group over the
long term. If any of the significant clients of either group elect not to renew
their contracts, it could have a material adverse effect on the results of
operations of that group.

Fluctuations in the quarterly revenues and operating results of either group
may impact the valuation of the stock of that group.

Both SNC and circle.com have historically experienced significant variation
in their respective quarterly and annual revenues and operating results. We
expect that future results of operations will continue this trend. These
fluctuations may result from a variety of factors, including:

. the timing of their respective clients' marketing campaigns;

. the implementation of new products or services;

. changes in the revenue mix among their various service offerings and
geographic locations; and

. the incurrence of costs relating to a project in one period and the
recognition of revenue for that project in a later period.

Due to these factors, quarterly revenues and operating results are difficult
to forecast. As a result, we believe that period-to-period comparisons of the
operating results of either group will not necessarily be meaningful with
respect to that group, and you should not rely on these comparisons as any
indication of future performance. The future quarterly operating results of
either group may not consistently meet the expectations of securities analysts
or investors, which in turn may have an adverse effect on the market price of
the stock of that group.

Either group may be adversely affected by a downturn in the marketing and
communications industry, which is cyclical.

The direct marketing, advertising and communications industry is cyclical and
as a result it is subject to downturns in general economic conditions and
changes in client business and marketing budgets. A downturn in general
economic conditions in one or more markets or changes in client business and
marketing budgets could have a material adverse affect on the business,
financial condition and results of operations of either group.

Both SNC and circle.com may have difficulty competing in their respective
markets.

SNC conducts business in the highly competitive direct marketing, advertising
and communications industry. We expect this industry to remain competitive. SNC
competes with large multinational direct marketing, advertising and
communications companies, as well as numerous smaller agencies that operate in
one or more countries or local markets, to maintain existing client
relationships and to obtain new clients and assignments.

Recently, traditional advertising agencies also have been competing with
major consulting firms that have developed practices in direct marketing,
advertising and communications. New competitors also include smaller companies
such as systems integrators, database marketing and modeling companies and
telemarketers, which offer technological solutions to direct marketing,
advertising and communications issues faced by clients. See "SNC--Business--
Competition."

24
<PAGE>

Circle.com competes in the Internet professional services market which is
characterized by increasing competition and the rapid adoption of new
technologies. Circle.com faces competition from a wide range of traditional
players including:

. Internet professional service providers;

. online direct marketing firms;

. technology integrators; and

. strategic consulting firms.

A number of circle.com's competitors have capabilities and resources equal to
or greater than it does. In addition, there are relatively few barriers
preventing competitors from entering the Internet professional services
industry. As a result, new companies may enter into the market at any time and
threaten the business of circle.com. Existing or future competitors may develop
or offer comparable or superior services at a lower price, which could have a
material adverse effect on the business, financial condition and results of
operations of circle.com. See "Circle.com--Business--Competition."

If either group fails to attract and retain employees, its growth could be
limited and its business may be adversely affected.

Our future success will depend in large part upon the abilities and continued
service of our executive officers and other key employees. We cannot assure you
that we will be able to retain the services of our executive officers and key
employees. We have employment agreements with a number of our executive
officers and non-competition agreements with much of our key personnel,
including each of our executive officers. However, these persons may still
leave us or compete with us and we cannot guarantee that the courts will
enforce the non-competition agreements. Many of our key personnel participate
in our stock incentive plan. While we believe that this provides incentive to
these employees to remain with us, we cannot guarantee that this will be the
case.

In addition, we must be able to attract, train and retain additional highly
skilled executive-level management and creative, technical, consulting and
sales personnel. The competition in our industry for skilled personnel is
intense, and we cannot be sure that we will be successful in attracting,
training and retaining such personnel. An inability to hire and retain
employees would increase our recruiting and training costs and decrease
operating efficiencies and productivity. This could have a material adverse
effect on our business.

A small number of stockholders could exercise substantial influence over us.

Daniel M. Snyder, our Chairman of the Board of Directors and Chief Executive
Officer, and Michele D. Snyder, our Vice Chairman, President, Chief Operating
Officer and a director, beneficially own approximately 12.4% and 4.4%,
respectively, of the outstanding shares of our common stock. As a result, Mr.
Snyder individually, and he and Ms. Snyder if they act in concert, can exercise
substantial influence over our business through their voting power with respect
to the election of directors and all other matters requiring action by
stockholders. This concentration of share ownership may have the effect of
delaying or discouraging a change in control in Snyder Communications. Mr.
Snyder and Ms. Snyder are brother and sister.

Regulatory and legal uncertainties could harm our business.

Several industries in which our clients operate are subject to varying
degrees of governmental regulation. Generally, compliance with these
regulations is the responsibility of our clients. However, we could be subject
to a variety of enforcement or private actions for our failure or the failure
of our clients to comply with these regulations. These actions could have a
material adverse affect on our business.

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<PAGE>

From time to time state and federal legislation is proposed with regard to
the use of proprietary databases of consumer groups. The fact that we generate
and receive data from many sources increases the uncertainty of the regulatory
environment. As a result, there are many ways both domestic and foreign
governments might attempt to regulate our use of our data. Any such
restrictions could have a material adverse affect on our business.

The services we offer outside the United States may be subject to foreign
regulations including:

.advertising content;

.promotions of financial products;

.activities requiring customers to send money with mail orders; and

.the maintenance and use of customer data held on databases.

The year 2000 problem may adversely affect the business of either group.

The year 2000 problem is the potential for system and processing failures of
date-related data arising from the use of two digits by computer-controlled
systems, rather than four digits, to define the applicable year. We believe
that our internal software and hardware systems will function properly with
respect to dates in the year 2000 and beyond. However, we cannot assure you
that this will be the case until these systems are operational in the year
2000. In addition, year 2000 problems of our clients could affect our systems
or operations. Widespread year 2000 difficulties could also decrease demand for
our services as companies expend resources upgrading their computer systems. As
part of our analysis of the year 2000 problem, we have analyzed the impact of
the "worst case scenario" on our business. The "worst case scenario" would
occur if the statements and warranties of our vendors concerning their year
2000 compliance and upgrade programs were entirely false, our current upgrades
were unsuccessful and our contingency plan failed, resulting in a critical
systems failure throughout Snyder Communications as a whole. This would have a
material adverse effect on our businesses.

Risk Factors Relating to circle.com

We need to keep pace with changing communications technologies in order to
provide effective Internet-based professional services.

Our success depends on our ability to keep pace with the rapid changes
occurring in communications technologies and the new and improved devices and
services that result from these changes. Our inability to respond quickly and
cost-effectively to changing communications technologies and devices could make
our existing service offering non-competitive and may cause us to lose our
market share. For example, if the Internet is rendered obsolete or less
important by fast, more efficient technologies, we must be prepared to offer
non-Internet-based solutions or risk losing current and potential clients. In
addition, to the extent that mobile phones, pagers, personal digital assistants
or other devices become important aspects of Internet-based professional
services, we need to have the technological expertise to incorporate them into
our solutions.

Lack of growth or decline in Internet usage could cause our business to
suffer.

We have derived most of our revenue from projects involving the Internet. The
Internet is new and rapidly evolving. Our business will be adversely affected
if Internet usage does not continue to grow. A number of factors may inhibit
Internet usage. These factors include inadequate network infrastructure,
security concerns, inconsistent service quality and lack of cost-effective,
high-speed service. On the other hand, if Internet usage grows, the Internet
infrastructure may not support the demands this growth will place on it. The
Internet's performance and reliability may decline. In addition, outages and
delays have occurred throughout the Internet network infrastructure and have
interrupted Internet service. If these outages or delays occur frequently in
the future, Internet usage could grow more slowly or decline.

26
<PAGE>

Industry analysts and others have made many predictions concerning the growth
of the Internet as a business medium. These predictions should not be relied
upon. If the market for strategic Internet services develops more slowly than
expected, or if our services do not achieve market acceptance, our business
will not succeed and the value of circle.com stock will decline.

We may also incur substantial costs to keep up with changes surrounding the
Internet. Unresolved critical issues concerning the commercial use and
government regulations of the Internet include the following:

. security;

. cost and ease of Internet access;

. intellectual property ownership;

. privacy; and

. taxation.

Any costs we incur because of these factors could materially and adversely
affect our business, financial condition and results of operations.

Misappropriation of our trademarks and other proprietary rights could harm
our reputation, affect our competitive position and cost us money.

We believe our trademarks and other proprietary rights are important to the
success and competitive position of circle.com. If we are unable to protect our
trademarks and other proprietary rights against unauthorized use by others, our
reputation among existing and potential clients could be damaged and our
competitive position adversely affected. We have registered certain of our
trademarks in the United States and abroad. We use our best efforts to limit
access to and distribution of our proprietary information. We cannot assure
that these strategies will be adequate to deter misappropriation of our
proprietary information and materials.

Our strategies to deter misappropriation could be inadequate in light of the
following risks:

. development of similar software or applications by our competitors;

. undetected misappropriation of our proprietary information or materials;

. unenforceability of the non-competition agreements entered into by our
key employees; and

. non-recognition or inadequate protection of our proprietary rights in
certain foreign countries.

If any of these risks materialize, we could be required to spend significant
amounts to defend our rights and our managerial resources could be diverted. In
addition, our trademarks and other proprietary rights may decline in value or
not be enforceable. See "Circle.com--Business--System Architecture and Design
of the DME(TM)," and "Circle.com--Business--Intellectual Property Rights" for
more information concerning our intellectual property.

We have a history of losses and may need additional financing.

Circle.com has experienced operating losses, as well as net losses, since it
began operations. Similarly, in the future, we may not generate sufficient
revenue from operations to pay all of our operating or other expenses. If we
fail to generate sufficient cash from our operations to pay these expenses, our
management will need to identify other sources of funds, including Snyder
Communications. We may not be able to borrow money or issue more shares of
circle.com stock to meet our cash needs. Even if we can find sources of
financing, they may not be on terms that are favorable or reasonable from our
perspective. See "Circle.com--Management's Discussion and Analysis of Financial
Condition and Results of Operations" for a more complete description of our
historical financial condition, results of operations and liquidity.

27
<PAGE>

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

We believe that many of the statements included in this proxy statement and
prospectus, including those under the captions:

. ""Proxy Statement and Prospectus Summary;"

. ""Risk Factors;"

. ""Snyder Communications--Management's Discussion and Analysis of
Financial Condition and Results of Operations;"

. ""SNC--Management's Discussion and Analysis of Financial Condition and
Results of Operations."

. ""SNC--Business;"

. ""Circle.com--Management's Discussion and Analysis of Financial
Condition and Results of Operations;" and

. ""Circle.com--Business;"

may be forward looking statements. Forward-looking statements can be identified
by the use of forward-looking words, such as "may," "will," "project,"
"estimate," "anticipate," "believe," "expect," "continue," "potential,"
"opportunity," or the negative of those terms or other variations of those
terms or comparable words or expressions.

All forward-looking statements are inherently uncertain as they are based on
our current expectations and assumptions concerning future events and they are
subject to numerous known and unknown risks and uncertainties. The Private
Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-
looking statements.

In order to comply with the terms of the safe harbor, we note that a variety
of the risks and uncertainties that we discuss in detail under "Risk Factors"
could cause our actual results and experience to differ materially from those
expected. Readers are cautioned not to place undue reliance on forward-looking
statements in this proxy statement and prospectus, which speak only as of the
date of this proxy statement and prospectus.

WHERE YOU CAN FIND MORE INFORMATION

Federal securities law requires us to file information with the Securities
and Exchange Commission concerning our business and operations. Accordingly, we
file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms located at 450 Fifth Street, N.W., Washington,
D.C. 20549. You can also do so at the following regional offices of the
Commission:

. Seven World Trade Center, 13th Floor, New York, New York 10048.

. Northwest Atrium Center, 5000 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511.

Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public from the
SEC's web site at: http://www.sec.gov. Copies of these reports, proxy
statements and other information also can be inspected at the offices of the
New York Stock Exchange at 20 Broad Street, New York, NY 10005.

We have filed with the SEC a registration statement on Form S-4 under the
Securities Act, with respect to the common stock that we may distribute under
this proxy statement and prospectus. This proxy statement and prospectus, which
is a part of the registration statement, does not include all the information
contained in the registration statement and its exhibits. For further
information with respect to Snyder Communications and its

28
<PAGE>

common stock, you should consult the registration statement and its exhibits.
Statements contained in this proxy statement and prospectus concerning the
provisions of any documents are summaries of those documents, and we refer you
to the documents filed with the SEC for more information. The registration
statement and any of its amendments, including exhibits filed as a part of the
registration statement or an amendment to the registration statement, are
available for inspection and copying as described above.

The SEC allows us to "incorporate by reference" the information we file with
them. This means that we can disclose important information to you by
referring you to the other information we have filed with the SEC. The
information that we incorporate by reference is considered to be part of this
proxy statement and prospectus. Information that we file later with the SEC
will automatically update and supersede this information.

The following documents filed by Snyder Communications with the SEC pursuant
to the Securities Act of 1933, and the Exchange Act of 1934 (File No. 1-12145)
and any future filings under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act made prior to the termination of the offering are incorporated by
reference:

. Snyder Communications' Annual Report on Form 10-K for its fiscal year
ended December 31, 1998;

. Snyder Communications' Current Reports on Form 8-K filed with the SEC on
March 2, 1999 and March 19, 1999; and

. Snyder Communications' Quarterly Report on Form 10-Q for its first
quarter ended March 31, 1999, which was amended on Form 10-Q/A filed
with the SEC on June 28, 1999.

You can request a free copy of the above filings or any filings subsequently
incorporated by reference into this proxy statement and prospectus by writing
or calling us at:

Snyder Communications, Inc.
Two Democracy Center
6903 Rockledge Drive, 15th Floor
Bethesda, Maryland 20817
Attention: Secretary
Telephone: (301) 468-1010

You should rely only on the information provided or incorporated by
reference in this proxy statement and prospectus. We have not authorized
anyone else to provide you with additional or different information. The
common stock is not being offered in any state where the offer is not
permitted. You should not assume that the information in this proxy statement
and prospectus is accurate as of any date other than the date on the front of
the proxy statement and prospectus.

29
<PAGE>

INFORMATION ABOUT THE SPECIAL MEETING AND VOTING

Date, Time And Place Of Meeting

We are providing this proxy statement and prospectus to you in connection
with the solicitation of proxies by our board of directors for use at the
special meeting. The special meeting will be held on , 1999, at [10:00]
a.m., eastern time, at The Four Seasons Hotel, 2800 Pennsylvania Avenue, N.W.,
Washington, D.C. 20007. This proxy statement and prospectus is first being
mailed to our stockholders on or about , 1999.

Record Date

We have established , 1999 as the record date for the special meeting.
Only holders of record of shares of our existing common stock at the close of
business on this date will be eligible to vote at the special meeting.

Proposals To Be Considered At The Meeting

You will be asked to consider and vote on the three proposals described in
this proxy statement and prospectus.

We will only implement a proposal if all of the proposals are approved. If
any of the proposals are not approved, we will not implement any of them.

We do not expect that any other matter will be brought before the special
meeting. If, however, other matters are properly presented, the individuals
named on your proxy card will vote in accordance with their judgment with
respect to those matters.

Vote Required To Approve The Proposals

The recapitalization proposal will require the favorable vote of the holders
of a majority of the outstanding shares of existing common stock. As a result,
abstentions and broker non-votes on the recapitalization proposal will have the
same effect as negative votes. Broker non-votes occur when a broker returns a
proxy but does not have authority to vote on a particular proposal.

Each of the related stock plan proposals will require the favorable vote of a
majority of the votes cast at the special meeting. As a result, abstentions and
broker non-votes will not be considered a vote either for or against these
proposals.

Each outstanding share of existing common stock is entitled to one vote on
each proposal. As of June 22, 1999, the most recent practicable date prior to
the date of this proxy statement and prospectus, we had issued and outstanding
75,580,975 shares of existing common stock. The shares of existing common stock
held in our treasury will not be entitled to vote or counted in determining the
number of outstanding shares.

Our directors and executive officers beneficially owned approximately 26.8%
of the outstanding shares of our existing common stock as of June 22, 1999.

Quorum

In order to carry on the business of the special meeting, we must have a
quorum. This means a majority of the outstanding shares of our existing common
stock must be represented in person or by proxy at the special meeting.
Abstentions and broker non-votes will count for quorum purposes.

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<PAGE>

Procedure For Voting By Proxy

If you properly fill in your proxy card and send it to us in time to vote,
your shares will be voted as you have directed. If you sign the proxy card but
do not make specific choices, the individuals named on your proxy card will
vote your shares in favor of approval and adoption of each proposal. If you
mark "abstain" on your proxy card, your shares will be counted as present for
purposes of determining the presence of a quorum. If necessary, unless you have
indicated on your proxy card that you wish to vote against one or more of the
proposals, the individuals named on your proxy card may vote in favor of a
proposal to adjourn the special meeting to a later date in order to solicit and
obtain sufficient votes for any of the proposals.

A proxy card is enclosed for your use. To vote without attending the special
meeting in person, you should complete, sign, date and return the proxy card in
the accompanying envelope, which is postage-paid if mailed in the United
States.

If you have completed and returned a proxy card, you can still vote in person
at the special meeting. You may revoke your proxy before it is voted by:

. submitting a new proxy card with a later date;

. by voting in person at the special meeting; or

. by filing with the Secretary of our company a written revocation of
proxy.

Attendance at the special meeting will not of itself constitute revocation of
a proxy.

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<PAGE>

PROPOSAL 1--THE RECAPITALIZATION PROPOSAL

General

You are being asked to consider and approve the recapitalization proposal. If
approved, the recapitalization proposal will allow us to adopt an amended and
restated certificate of incorporation under which each outstanding share of our
existing common stock will be changed into one share of SNC stock and .25 of a
share of circle.com stock. The shares of circle.com stock that you receive in
the recapitalization will initially represent 80% of the equity value
attributed to circle.com. The remaining equity value attributed to circle.com
will remain with SNC as its "retained interest" in circle.com.

We intend that circle.com stock will separately reflect or "track" the
performance of our Internet professional services business which we call
circle.com. The SNC stock will reflect the performance of the remainder of
Snyder Communications' businesses, including its retained interest in
circle.com, which we call SNC. If the recapitalization proposal is implemented,
your existing stock certificates will represent SNC stock. We anticipate that
certificates representing circle.com stock, along with cash for any fractional
shares, will be mailed to you as promptly as practicable after the
recapitalization.

If the recapitalization proposal is implemented, your rights as stockholders
will be governed by Delaware law and the amended and restated certificate of
incorporation. The amended and restated certificate of incorporation contains
the terms of the SNC stock and the circle.com stock.

If the recapitalization proposal and the related proposals are not approved,
our existing common stock will not be changed into SNC stock and circle.com
stock.

If the recapitalization proposal and the related proposals are approved, we
plan to implement the recapitalization proposal by filing the amended and
restated certificate of incorporation with the Secretary of State of the State
of Delaware. We currently anticipate that this filing will be made as promptly
as practicable after the special meeting. No state or federal regulatory
approvals are required for the completion of the recapitalization proposal.

The amended and restated certificate of incorporation would, among other
things, authorize 405 million shares of capital stock, and establish the
rights, limitations and preferences of those shares. The authorized shares of
capital stock would include 5 million shares of preferred stock and 400 million
shares of common stock, to consist of:

. 320 million shares of SNC stock; and

. 80 million shares of circle.com stock.

Our board of directors may decide not to implement the recapitalization
proposal for any reason at any time prior to the filing of the amended and
restated certificate of incorporation with the Delaware Secretary of State,
either before or after stockholder approval.

Following the implementation of the recapitalization proposal, we may from
time to time, by action of our board of directors,

. offer either or both classes of common stock for cash in one or more
public or private offerings,

. issue shares of either or both classes of common stock to our employees
pursuant to employee benefit plans,

. issue shares of either or both classes of common stock as consideration
for acquisitions or investments, or

. issue shares of either or both classes of common stock for any other
proper corporate purpose.

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<PAGE>

So long as sufficient authorized shares are available, the timing, size,
sequence and terms of any of these transactions would be determined by our
board of directors, without your further approval, unless obtaining your
approval is considered advisable by the board of directors or required by
applicable law, regulation or NYSE or Nasdaq National Market System
requirements.

The affirmative vote of a majority of our existing common stock issued and
outstanding on the record date is required for approval of the recapitalization
proposal.

Background and Reasons for the Recapitalization Proposal

Our board of directors approved the recapitalization proposal following its
review of various alternatives for enhancing the overall return to our
stockholders, advancing our financial and strategic objectives and creating
flexibility for our future growth.

The recapitalization proposal is designed to separate the performance of our
circle.com business from the rest of Snyder Communications and to charge the
managers of each group with the responsibility of maximizing the returns from
their businesses. Holders of SNC stock are expected to benefit from the
earnings growth and cash flow provided by SNC and its retained interest in
circle.com. Holders of circle.com stock are expected to benefit from the
earnings growth and cash flow provided by circle.com.

Our principal reason for pursuing the recapitalization proposal is to create
a separate stock that relates solely to our Internet professional services
activities. We are in the process of accelerating the growth and development of
the marketing, consulting and technological capabilities of circle.com. As we
aggressively invest in the creation and enhancement of these capabilities and
the pursuit of a dominant market position, we will be competing against
competitors who will be aggressively investing in the development of market
share. The creation of a separate stock will also create a vehicle for
providing stock options and stock ownership in circle.com stock to attract and
retain key management of circle.com.

At a meeting held on May 6, 1999, our board of directors considered a variety
of proposals to increase the overall value of our existing common stock to our
stockholders. Our board of directors evaluated alternatives available to us in
view of its strategic objective of accelerating the growth and development of
our core business. Our board of directors had extensive discussions with our
senior officers. Among the alternatives which they considered were:

. the preservation of our current equity and operating structure;

. the creation of two classes of common stock to reflect separately the
results of our direct marketing, advertising and communications business
and our Internet professional services business;

. an initial public offering of common stock of circle.com and the spin-
off of the balance of that company to holders of existing common stock;
and

. the formation of a subsidiary to hold circle.com's business and the
spin-off of this subsidiary to holders of existing common stock.

Our board of directors used several criteria to contrast the benefits and
drawbacks of these transaction alternatives to our stockholders including:

. tax efficiency;

. capital markets acceptance;

. likelihood of success;

. flexibility to provide equity incentives for circle.com's employees; and

. ability of circle.com to raise equity capital in the future.

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<PAGE>

Our board of directors concluded that at the current time the
recapitalization would be advantageous relative to an initial public offering
and spin-off of circle.com's business because it would allow circle.com to have
access to the capital and the full complement of resources of Snyder
Communications. The recapitalization proposal allows circle.com to access SNC's
balance sheet for its capital needs until circle.com is in a position to access
capital on its own. The recapitalization proposal also allows circle.com to
leverage the established infrastructure of Snyder Communications.

On June 22, 1999, our board of directors confirmed its prior conclusions
concerning available alternatives and identified the following as the
advantages of the recapitalization proposal:

. the creation of two classes of common stock intended to reflect
separately the performance of SNC and circle.com allows us to appeal to
different investor groups with different expectations with regards to
earnings, cash flow and revenue growth. The SNC stock should continue to
be valued in the market based on growth in earnings and cash flows.
Shareholders of businesses operating in the interactive and e-commerce
arena, such as circle.com, have different expectations of financial
performance. As a result, holders of SNC stock and circle.com stock may
be distinct investor groups;

. the creation of two classes of common stock should enhance the autonomy
of the groups by allowing each group and its management to focus on that
group's own identity, business strategy, financial model and culture and
to structure employee incentives which are tied directly to the share
performance of that group;

. the recapitalization proposal, in contrast to other alternatives, will
allow us to retain the advantages of doing business as a single company
and allow each group to capitalize on relationships with the other
group. As part of one company, each group will be in a position to
benefit from cost savings and synergies with the other compared to the
costs each group would incur if it operated separately; and

. the implementation of the recapitalization proposal should not be
taxable to us or you, except for cash you receive in lieu of fractional
shares of circle.com stock.

Our board of directors also considered the following potential disadvantages
of the recapitalization proposal:

. the recapitalization proposal requires a complex capital structure that
may not be well understood by investors and thus could inhibit the
efficient valuation of either or both classes of common stock;

. the potential diverging or conflicting interests of the two groups and
the issues that could arise in resolving any conflicts;

. investors in SNC stock and circle.com stock will be exposed to the risks
of our consolidated businesses and liabilities because both groups
remain legally a part of Snyder Communications; and

. the market values of SNC stock and circle.com stock could be affected by
market reaction to decisions by our board of directors and management
that investors perceive as affecting differently one class of common
stock compared to the other, such as decisions regarding the allocation
of assets, expenses, liabilities and corporate opportunities and
financial resources between the groups.

Our board of directors determined that on balance the potential advantages of
the recapitalization proposal outweigh the potential disadvantages and
concluded that the recapitalization proposal is in the best interests of our
company and our stockholders.

On June 22, 1999, our board of directors unanimously approved the
recapitalization and the calling of the special meeting.

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<PAGE>

Recommendation of the Board of Directors

Our board of directors has unanimously approved the recapitalization proposal
and believes its adoption to be in our best interests and the best interests of
our stockholders. Accordingly, our board of directors unanimously recommends
that you vote "for" the recapitalization proposal.

Proposal 1 is conditioned upon approval by stockholders of the stock
incentive plan proposal and the stock purchase plan proposal. If either related
proposal is not approved by stockholders and implemented by the board, Proposal
1 will not be implemented.

Dividend Policy

We currently intend to retain all of our earnings to finance our growth and
development. We do not expect to pay any dividends on SNC stock or circle.com
stock in the foreseeable future.

Although we do not expect to pay any dividends for the foreseeable future on
either series of common stock, we will otherwise be permitted to pay dividends
on:

. SNC stock out of the assets of Snyder Communications legally available
for the payment of dividends under Delaware law, but the total amounts
paid as dividends on SNC stock cannot exceed the Available Dividend
Amount for SNC; and

. circle.com stock out of the assets of Snyder Communications legally
available for the payment of dividends under Delaware law (and transfer
corresponding amounts to SNC in respect of its retained interest in
circle.com), but the total amounts paid as dividends on circle.com stock
and the corresponding amounts transferred to SNC in respect of its
retained interest cannot exceed the Available Dividend Amount for
circle.com.

The "Available Dividend Amount" for a group is based on the amount that would
be legally available for the payment of dividends under Delaware law if that
group was a separate Delaware corporation.

For a more detailed definition of Available Dividend Amount, see "Description
of SNC Stock and circle.com Stock--Dividends." We expect that determinations to
pay dividends on SNC stock or circle.com stock would be based primarily upon
the financial condition, results of operations, capital requirements, any
restrictions contained in financing or other agreements binding upon Snyder
Communications and any other factors our board considers relevant.

Management and Allocation Policies

Because SNC and circle.com will each be a part of a single company, we have
carefully considered a number of issues with respect to the financing of SNC
and circle.com, competition between the groups, inter-group business
transactions, access to technology and know-how, corporate opportunities and
the allocation of debt, corporate overhead, interest, taxes and other charges
between the two groups. Our board of directors and management have established
policies to accomplish the fundamental objective of the recapitalization
proposal, which is to separate the business and operations of circle.com from
the remainder of the Snyder Communications business and to operate each group
on a stand-alone basis. These policies help to establish guidelines to help us
allocate costs and charges between the two groups on an objective basis and,
except as described below, to ensure that transactions between circle.com and
SNC are made on terms that approximate the terms that could be obtained from
unaffiliated third parties.

Policies Subject to Change Without Stockholder Approval

We have summarized our management and allocation policies as we expect them
to be effective upon the recapitalization. We are not requesting stockholder
approval of these policies.

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<PAGE>

Our board of directors may modify or rescind these policies, or may adopt
additional policies, in its sole discretion without stockholder approval.
However, our board of directors has no present plans to do so. A board of
directors' decision to modify or rescind such policies or adopt additional
policies could have different effects upon holders of SNC stock and holders of
circle.com stock or could result in a benefit or detriment to one class of
stockholders compared to the other class. Our board of directors would make any
decision in accordance with its good faith business judgment that the decision
is in the best interests of Snyder Communications and all of our stockholders
as a whole.

Fiduciary and Management Responsibilities

Because SNC and circle.com will continue to be a part of a single company,
our directors and officers will have the same fiduciary duties to holders of
the SNC stock and the circle.com stock that they currently have to the holders
of our existing common stock. Under Delaware law, absent an abuse of
discretion, a director or officer will be deemed to have satisfied his or her
fiduciary duties to Snyder Communications and our stockholders if that person
is disinterested and acts in accordance with his or her good faith business
judgment in the interests of Snyder Communications and all of our stockholders
as a whole. Our board of directors and our chief executive officer, in
establishing policies with regard to intracompany matters such as business
transactions between groups and allocations of assets, liabilities, debt,
corporate overhead, taxes, interest, corporate opportunities and other matters,
will consider various factors and information which could benefit or cause
detriment to the stockholders of the respective groups and will make
determinations in the best interests of Snyder Communications and all of our
stockholders as a whole.

Because the recapitalization will not change our corporate structure, Daniel
M. Snyder, the Chairman of the Board of Directors and Chief Executive Officer,
will have the same duties and responsibilities for the management of our assets
and businesses which comprise SNC and circle.com following the recapitalization
as he has now. The individuals named below will hold the positions listed next
to their names and will continue to have the same general responsibilities that
they had prior to the recapitalization. The costs attributable to their
responsibilities will be allocated as discussed below under "--Financial
Statements; Allocation Matters--Corporate Overhead and Administrative Shared
Services."

<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Daniel M. Snyder.................... 34 Chairman of the Board of Directors and Chief
Executive Officer
Michele D. Snyder................... 36 Vice Chairman, President and Chief Operating
Officer and Director
A. Clayton Perfall.................. 40 Chief Financial Officer and Director
Mortimer B. Zuckerman............... 62 Director
Fred Drasner........................ 56 Director
Philip Guarascio.................... 58 Director
Mark E. Jennings.................... 37 Director
</TABLE>

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

Michele D. Snyder, a founder of our company, has been with Snyder
Communications since its inception, and serves as Vice Chairman, President and
Chief Operating Officer and a director. Ms. Snyder is Mr. Snyder's sister.

A. Clayton Perfall has served as Chief Financial Officer and a director of
Snyder Communications since September 1996. Prior to joining Snyder
Communications, Mr. Perfall spent fifteen years with Arthur Andersen. During
his tenure as a partner with Arthur Andersen, Mr. Perfall had a wide range of
responsibilities with the Washington, D.C., Baltimore, Maryland and Richmond,
Virginia marketplaces, including responsibility for the firm's Structured
Financial Products tax practice and responsibility for its Business

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Valuation Services Group. Mr. Perfall was a key participant in the development
of Arthur Andersen's business strategies, the hiring of its professional staff
and the development and marketing of its services.

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

Fred Drasner, a director of Snyder Communications, has been the Chief
Executive Officer of Daily News, L.P. and Co-Publisher of the New York Daily
News since 1993, the President of U.S. News & World Report, L.P. from 1985 to
February 1997 and Chief Executive Officer of U.S. News & World Report since
1985, the Chairman and Chief Executive Officer of Applied Graphics
Technologies, Inc. since April 1996, the Chief Executive Officer of Applied
Printing Technologies, L.P. since 1986 and the Vice-Chairman and Chief
Executive Officer of The Atlantic Monthly Company since 1986.

Philip Guarascio, a director and a member of the audit and compensation
committees of Snyder Communications, has been a Vice President of General
Motors Corporation since July 1994, where he is primarily responsible for
worldwide advertising resource management, managing consolidated media
placement efforts and working with General Motors' North American Operations
vehicle divisions to increase marketing effectiveness and efficiency. Mr.
Guarascio also manages corporate image advertising activities and oversees GM
Credit Card operations and GM's Enterprise Customer System. Prior to this
current position, from July 1992 to July 1994, Mr. Guarascio served as General
Manager of Marketing and Advertising for General Motors' North American
Operations. Mr. Guarascio joined General Motors in 1985 after 21 years with the
New York advertising agency, D'Arcy, Masius, Benton & Bowles (formerly Benton &
Bowles, Inc.). Mr. Guarascio is Chairman Emeritus of the Advertising Council
and serves on the Executive Committee of that organization. He also serves on
the boards of the Association of National Advertisers, the Women's Sports
Foundation, the Ellis Island Restoration Commission and the American Film
Institute.

Mark E. Jennings, a director and a member of the audit and compensation
committees of Snyder Communications, has been a Managing Partner of Generation
Partners L.P. since August 1995. Generation Partners is the managing general
partner of Generation Capital Partners L.P., a $165 million investment
partnership. Prior to August 1995, he was a Partner of Centre Partners L.P., an
investment affiliate of Lazard Freres & Co., where he had been employed since
1987. From 1986 to 1987, Mr. Jennings was employed at Goldman, Sachs & Co. in
its Corporate Finance Department. Mr. Jennings also serves on the board of
directors of Scientific Games, Inc.

Our chief executive officer, with the approval of our board of directors, has
designated separate management teams for each of SNC and circle.com to ensure
that the efforts of each team of managers are focused on the business and
operations for which they have responsibility. These individuals are named in
"SNC--Business --Management" and "Circle.com--Business--Management."

Common Stock Ownership of Directors and Senior Officers

As a policy, our board of directors will periodically monitor the ownership
of shares of SNC stock and shares of circle.com stock by our directors and
senior officers and our options grants to them so that their interests are
generally aligned with the two classes of common stock and with their duty to
act in the best interests of Snyder Communications and our stockholders as a
whole. However, because of the anticipated differences in trading values
between the SNC stock and circle.com stock, the actual value of their interests
in the SNC stock and circle.com stock will vary significantly. Accordingly, it
is possible that directors or senior officers could favor one group over the
other due to their stock and option holdings.

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Financing Activities

We manage most financial activities on a centralized, consolidated basis.
These activities include the investment of surplus cash, the issuance,
repayment and repurchase of short-term and long-term debt, and the issuance and
repurchase of common stock and preferred stock.

No interest expense has been reflected in the combined financial statements
of circle.com for cash transfers from Snyder Communications or any of its
affiliates and no interest income from circle.com has been reflected in the
financial statements of Snyder Communications for any period prior to the date
on which circle.com stock is issued.

After the date on which circle.com stock is first issued:

(1) Snyder Communications will attribute each future incurrence or
issuance of external debt and the proceeds of that incurrence or issuance
to SNC, unless the board of directors determines otherwise. The board of
directors may, but is not required to, attribute an incurrence or issuance
of debt, and the proceeds of that incurrence or issuance, to circle.com to
the extent that Snyder Communications incurs or issues the debt for the
benefit of circle.com.

(2) Snyder Communications will attribute each future issuance of SNC
stock, and the proceeds of that issuance, to SNC. Snyder Communications may
attribute any future issuances of circle.com stock and the proceeds of that
issuance:

. to SNC in respect of its retained interest in circle.com, in a
manner analogous to a secondary offering of common stock of a
subsidiary owned by a corporate parent; or

. to circle.com, in a manner analogous to a primary offering of common
stock.

Dividends on and repurchases of SNC stock will be charged against SNC,
and dividends on and repurchases of circle.com stock will be charged
against circle.com. In addition, at the time of any dividend on circle.com
stock, Snyder Communications will credit to SNC, and charge against
circle.com, a corresponding amount in respect of SNC's retained interest in
circle.com. See "Description of SNC Stock and circle.com Stock--SNC's
Retained Interest in circle.com."

(3) SNC intends to fund circle.com's liquidity needs in the ordinary
course of business. However, significant expenditures will be funded on a
case by case basis as determined by our board of directors. Our board of
directors will determine, in its sole discretion, whether to provide any
particular funds to either SNC or circle.com and will not be obligated to
do so.

(4) Snyder Communications will account for all cash transfers from one
group to or for the account of the other group, other than transfers in
return for assets or services rendered or transfers in respect of SNC's
retained interest that correspond to dividends paid on circle.com stock as
inter-group revolving credit advances unless:

. our board of directors determines that a given transfer or type of
transfer should be accounted for as a long-term loan;

. our board of directors determines that a given transfer or type of
transfer should be accounted for as a capital contribution
increasing SNC's retained interest in circle.com; or

. our board of directors determines that a given transfer or type of
transfer should be accounted for as a return of capital reducing
SNC's retained interest in circle.com.

There are no specific criteria to determine when Snyder Communications
will account for a cash transfer as a long-term loan, a capital
contribution or a return of capital rather than an inter-group revolving
credit advance. Our board of directors would make that determination in the
exercise of its

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business judgment at the time of the transfer, or the first of that type of
transfer, based upon all relevant circumstances. Factors our board of
directors would consider include:

. the current and projected capital structure of each group;

. the relative levels of internally generated funds of each group;

. the financing needs and objectives of the recipient group;

. the availability, cost and time associated with alternative
financing sources; and

. prevailing interest rates and general economic conditions.

(5) Any cash transfer accounted for as an inter-group revolving credit
advance will bear interest at the rate at which our board of directors or
its designee, in its sole discretion, determines Snyder Communications
could borrow those funds on a revolving credit basis. Any cash transfer
accounted for as a long-term loan will have interest rate, amortization,
maturity, redemption and other terms that generally reflect the then
prevailing terms on which the board of directors, in its sole discretion,
determines Snyder Communications could borrow those funds.

(6) Any cash transfer from SNC to circle.com or for circle.com's account
accounted for as a capital contribution will correspondingly increase
circle.com's stockholders' equity and SNC's retained interest in
circle.com. As a result, the number of shares of circle.com stock that
Snyder Communications may issue for the account of SNC in respect of its
retained interest (which we call the "Number of Shares Issuable With
Respect to SNC's Retained Interest in circle.com") will increase by the
amount of the capital contribution divided by the Market Value of
circle.com stock on the date of transfer. You can find the definition of
Market Value in "--Description of SNC Stock and circle.com Stock--Certain
Definitions."

This increase in the Number of Shares Issuable With Respect to SNC's
Retained Interest in circle.com may also be expressed as follows:

Amount of capital contribution to circle.com
--------------------------------------------
Market Value of one share of circle.com stock
on the date of transfer

(7) Any cash transfer from circle.com to SNC or for SNC's account
accounted for as a return of capital will correspondingly reduce
circle.com's stockholders' equity and SNC's retained interest in
circle.com. As a result, the Number of Shares Issuable With Respect to
SNC's Retained Interest in circle.com will decrease by the amount of such
return of capital divided by the Market Value of circle.com stock on the
date of transfer.

This decrease in the Number of Shares Issuable With Respect to SNC's
Retained Interest in circle.com may also be expressed as follows:

Amount of return of capital to SNC
----------------------------------
Market Value of one share of circle.com
stock on the date of transfer

Competition Between Groups

As a matter of Board policy, neither SNC nor circle.com will engage in each
other's principal businesses, except for joint transactions with each other.
Joint transactions may include joint ventures or other collaborative
arrangements to develop, market, sell and support new products and services.
Third parties may also participate in those joint transactions. See "--
Transfers of Assets Between Groups--Joint Transactions." The terms of any joint
transactions will be determined by our chief executive officer or, in
appropriate circumstances, our board of directors. See "Risk Factors -- Our
board of directors may change our management and allocation policies without
stockholder approval to the detriment of other group."

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Our chief executive officer or, in appropriate circumstances, our board of
directors, may change the policy regarding competition and make decisions
whether to permit indirect competition between the groups. Indirect
competition could occur if and when:

. one group uses products or services of third parties in that group's
products or services rather than using the other group's products or
services;

. a third party uses a product or service of one group in the third
party's products or services which compete with the other group's
products or services; or

. a group licenses technology allocated to that group to a third party
that is a competitor of the other group.

The groups may compete in a business which is not a principal business of
the other group.

Transfers of Assets Between Groups

Our board of directors has determined that any transfer of assets between
groups will be made at fair value, as determined by our board of directors,
except as described below. The consideration for these transfers may be paid
by one group to the other in cash or other consideration, as determined by our
board of directors.

Our board of directors has adopted specific policies for the sale of
products and services between groups and joint transactions with each other
and third parties as set forth below.

Sales of Products and Services Between Groups. A group will sell products or
services to the other group on terms that would be available from third
parties in commercial transactions. If terms for these transactions are not
available from a third party, the purchasing group will (1) pay for the
products at fair value as determined by our board of directors and (2) pay for
the services at fair value, as determined by our board of directors, or at the
cost, including overhead, of the selling group.

Joint Transactions. The groups may from time to time engage in transactions
jointly, including with third parties, as described under "--Competition
Between Groups." Research and development and other services performed by one
group for a joint venture or other collaborative arrangement will be charged
at fair value, as determined by our board of directors.

Access to Technology and Know-How

Each group will have free access to all of our technology and know-how,
excluding products and services of the other group, that may be useful in that
group's business, subject to obligations and limitations applicable to Snyder
Communications and to those exceptions that our board of directors may
determine. The groups will consult with each other on a regular basis
concerning technology issues that affect both groups.

Review of Corporate Opportunities

Our chief executive officer or, in appropriate circumstances, our board of
directors will review any matter which involves the allocation of a corporate
opportunity to either SNC or circle.com or in part to SNC and in part to
circle.com. In accordance with Delaware law, our chief executive officer or
our board of directors will make the determination with regard to the
allocation of any of these opportunities and the benefit of these
opportunities in accordance with their good faith business judgment of the
best interests of Snyder Communications and all of our stockholders as a
whole. Among the factors that they may consider in making this allocation is:

. whether a particular corporate opportunity is principally related to the
business of SNC or circle.com;

. whether one group, because of its managerial or operational expertise,
will be better positioned to undertake the corporate opportunity; and

. existing contractual agreements and restrictions.

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Financial Statements; Allocation Matters

We will prepare financial statements in accordance with generally accepted
accounting principles, consistently applied, for SNC and circle.com, and these
financial statements, taken together, will comprise all of the accounts
included in our corresponding consolidated financial statements. The financial
statements of each of SNC and circle.com will reflect the financial condition,
results of operations and cash flows of the businesses included in each group.

Group financial statements will also include allocated portions of our debt,
interest, corporate overhead and costs of administrative shared services and
taxes. We will make these allocations for the purpose of preparing each group's
financial statements. However, holders of SNC stock and circle.com stock will
continue to be subject to all of the risks associated with an investment in
Snyder Communications and all of our businesses, assets and liabilities. See
"Risk Factors--You will remain stockholders of one company and, therefore,
financial effects on one group could adversely affect the other" and the
historical financial statements for SNC and circle.com included in this proxy
statement and prospectus.

In addition to allocating debt and interest as described above under "--
Financing Activities" and assets as described above under "--Transfers of
Assets Between Groups," our board of directors has adopted the following
allocation policies, each of which is reflected in the combined financial
statements of the respective groups included in this proxy statement and
prospectus:

. Corporate Overhead and Administrative Shared Services. We will allocate
a portion of our corporate overhead to SNC and circle.com based upon the
use of services by that group. Corporate overhead includes costs of our
executive management, human resources, legal, accounting and auditing,
tax, treasury and strategic planning functions. We will allocate in a
similar manner a portion of our costs of administrative shared services,
such as information technology services. Where determinations based on
use alone are not practical, we will use other methods and criteria that
we believe are equitable and provide a reasonable estimate of the cost
attributable to the groups.

. Taxes. We will determine the federal income taxes of Snyder
Communications and our subsidiaries which own assets allocated between
the groups on a consolidated basis. We will allocate consolidated
federal income tax provisions and related tax payments or refunds
between the groups based principally on the taxable income and tax
credits directly attributable to each group. These allocations will
reflect each group's contribution, whether positive or negative, to
Snyder Communications' consolidated federal taxable income and the
consolidated federal tax liability and tax credit position. We will
credit tax benefits that can not be used by the group generating those
benefits but can be used on a consolidated basis to the group that
generated those benefits. Inter-group transactions will be treated as
taxed as if each group was a stand-alone company. Depending on the tax
laws of the respective jurisdictions, we will calculate state and local
income taxes on either a consolidated or combined basis or on a separate
corporation basis. We will allocate state income tax provisions and
related payments or refunds determined on a consolidated or combined
basis between the groups based on their respective contributions to the
consolidated or combined state taxable incomes. We will allocate state
and local income tax provisions and related tax payments which we
determine on a separate corporation basis between the groups in a manner
designed to reflect the respective contributions of the groups to the
corporation's separate state or local taxable income.

Description of SNC Stock and circle.com Stock

We have summarized below the material terms of the SNC stock and the
circle.com stock. The summary is not complete. We encourage you to read the
amended and restated certificate of incorporation that is attached as Annex A.
You can find the definitions of terms used in this section and not otherwise
defined under "--Certain Definitions."

This description refers in many places to "SNC's retained interest in
circle.com." This represents the ownership of SNC in that portion of circle.com
that is not represented by circle.com stock. The size of this

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<PAGE>

retained interest relative to the interest represented by circle.com stock may
change in the future if actions are taken, such as issuances of additional
shares of circle.com stock, repurchases of circle.com stock or transfers of
cash or other property between SNC and circle.com that change either the total
amount of the assets of circle.com or the number of shares of circle.com stock
outstanding. These actions, and the effect that they would have on the holders
of circle.com stock, are described further in this section.

General

Our existing certificate of incorporation authorizes us to issue 405 million
shares of stock, consisting of 400 million shares of common stock, par value
$0.001 per share, and 5 million shares of preferred stock, par value $0.001 per
share. As of June 22, 1999, 75,580,975 shares of existing common stock and no
shares of preferred stock were issued and outstanding.

The amended and restated certificate of incorporation will authorize us to
issue 405 million shares of stock as follows:

(1) 320 million shares of common stock, designated as SNC stock;

(2) 80 million shares of common stock, designated as circle.com stock;
and

(3) 5 million shares of preferred stock.

Shares of each class of stock will have a par value of $0.001 per share. We
will be able to issue shares of preferred stock in series, without stockholder
approval.

As a result of the recapitalization proposal, assuming the number of shares
of existing common stock then outstanding is the same as the number outstanding
on June 22, 1999, 75,580,975 shares of SNC stock and approximately 18,895,244
shares of circle.com stock will be issued and outstanding.

We intend circle.com stock to reflect the performance of our Internet
professional services business. We intend SNC stock to reflect the performance
of the rest of the businesses conducted by Snyder Communications and its
affiliates and a retained interest in circle.com. The shares of circle.com
stock that you receive in the recapitalization will initially represent 80% of
the equity value attributed to circle.com. The remaining equity value
attributed to circle.com will remain with SNC as its retained interest in
circle.com.

We will allocate all of Snyder Communications' consolidated assets,
liabilities, revenue, expenses and cash flow between SNC and circle.com. See
"Management and Allocation Policies."

Our board of directors will have the authority in its sole discretion to
issue authorized but unissued shares of common stock from time to time for any
proper corporate purpose. Our board of directors will have this authority
subject to limitations provided by Delaware law or the rules and regulations of
any securities exchange on which any series of outstanding common stock may
then be listed.

Dividends

We currently intend to retain future earnings to finance our growth and
development. Accordingly, we do not anticipate paying any cash dividends on
either class of common stock in the foreseeable future.

Dividends on the SNC stock and the circle.com stock will be subject to
substantially the same limitations as dividends on the existing common stock,
which are limited to legally available funds under applicable law and subject
to the prior payment of dividends on any outstanding shares of preferred stock.

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Although we do not expect to pay any dividends for the foreseeable future on
any series of common stock, we will otherwise be permitted to pay dividends on:

. SNC stock out of assets of Snyder Communications legally available for
the payment of dividends under Delaware law, but the total amount paid
as dividends on SNC stock cannot exceed the Available Dividend Amount
for SNC; and

. circle.com stock out of the assets of Snyder Communications legally
available for the payment of dividends under Delaware law (and transfer
corresponding amounts to SNC in respect of its retained interest in
circle.com). However, the total amounts paid as dividends on circle.com
stock and the corresponding amounts transferred to SNC in respect of its
retained interest in circle.com cannot exceed the Available Dividend
Amount for circle.com.

The "Available Dividend Amount" for SNC at any time is the amount that would
then be legally available for the payment of dividends on SNC's common stock
under Delaware law if:

(1) SNC and circle.com were each a separate Delaware corporation;

(2) SNC had outstanding a number of shares of common stock, par value
$0.001 per share, equal to the number of shares of SNC stock that are
then outstanding;

(3) the assumptions about circle.com set forth in the next sentence were
true; and

(4) SNC owned a number of shares of circle.com stock equal to the Number of
Shares Issuable With Respect to SNC's Retained Interest in circle.com.

Similarly, the "Available Dividend Amount" for circle.com at any time is the
amount that would then be legally available for the payment of dividends on
circle.com stock under Delaware law if circle.com were a separate Delaware
corporation having outstanding a number of shares of common stock, par value
$0.001 per share, equal to the number of shares of circle.com stock that are
then outstanding plus the Number of Shares Issuable With Respect to SNC's
Retained Interest in circle.com.

The amount legally available for the payment of dividends on common stock of
a corporation under Delaware law is generally limited to:

. the total assets of the corporation less its total liabilities, less

. the aggregate par value of the outstanding shares of its common and
preferred stock.

However, if that amount is not greater than zero, the corporation may also
pay dividends out of the net profits for the corporation for the fiscal year in
which the dividend is declared and/or the preceding fiscal year. As mentioned
above, these restrictions will form the basis for calculating the Available
Dividend Amounts for SNC and circle.com. These restrictions will also form the
basis for calculating the aggregate amount of dividends that Snyder
Communications as a whole can pay on its common stock (regardless of series).
Thus, net losses of either group, and any dividends and distributions on, or
repurchases of, either series of common stock, will reduce the assets legally
available for dividends on both series of common stock.

Subject to the foregoing limitations (and to any other limitations set forth
in any future series of preferred stock or in any agreements binding on Snyder
Communications from time to time), we have the right to pay dividends on both,
one or neither series of common stock in equal or unequal amounts,
notwithstanding the performance of either group, the amount of assets available
for dividends on either series, the amount of prior dividends paid on either
series, the respective voting rights of each series, or any other factor.

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<PAGE>

payable in shares of circle.com stock) we will credit to SNC, and charge
against circle.com, a corresponding amount in respect of SNC's retained
interest in circle.com. Specifically, the corresponding amount will equal:

(1)the aggregate amount of the dividend, times

(2) the Retained Interest Percentage.

No dividend or distribution on the circle.com stock, however, shall be
payable in shares of SNC stock or any security convertible into or exchangeable
or exercisable for shares of SNC stock unless the dividend is approved by the
affirmative vote of the holders of a majority of the outstanding shares of SNC
stock. Similarly, no dividend or distribution on the SNC stock shall be payable
in shares of circle.com stock or any security convertible into or exchangeable
or exercisable for shares of circle.com stock unless the dividend is approved
by the affirmative vote of the holders of a majority of the outstanding shares
of circle.com stock. See "--Voting Rights."

Mandatory Dividend, Redemption or Exchange on Disposition of All or
Substantially All of the Assets of circle.com

In general, if we sell in one or a series of related transactions All or
Substantially All of the Assets of circle.com, by the 85th trading day after
completion of the sale, we must do one of the following:

(1) declare and pay to holders of circle.com stock a dividend in cash or
securities (other than SNC stock) or other property or a combination of
the foregoing in an amount having a Fair Value as of the date of the
sale equal to their Proportionate Interest in the Net Proceeds of the
sale;

(2) redeem for cash, securities or property as provided in (1) above for
dividends, in an amount having a Fair Value equal to their
Proportionate Interest in the Net Proceeds of the sale, all of the
outstanding shares of circle.com stock (or, if circle.com continues
after the sale to own any material assets other than the proceeds of
the sale, a number of shares of circle.com stock having an aggregate
average Market Value, during the 20 consecutive Trading Day period
beginning on the 16th Trading Day immediately following the date on
which the sale is consummated, equal to that Fair Value); or

(3) convert each outstanding share of circle.com stock into the number of
shares of SNC stock at a 10% premium (based on the average Market Value
of circle.com stock as compared to the average Market Value of SNC
stock during the 20 consecutive Trading Day period beginning on the
16th Trading Day immediately following the date on which the sale is
consummated).

In connection with any special dividend on, or redemption of, circle.com
stock as described above, we will credit to SNC, and charge against circle.com,
a corresponding amount in respect of SNC's retained interest in circle.com.
Specifically, the corresponding amount will equal (1) the aggregate Fair Value
of the dividend or redemption times (2) the Retained Interest Percentage. In
addition, in connection with any redemption of circle.com stock as described
above, we will decrease the Number of Shares Issuable with Respect to SNC's
Retained Interest in circle.com by the same proportion as the proportionate
decrease in outstanding shares of circle.com caused by such redemption.

We may only pay a dividend or redeem shares of common stock as described
above if we have legally available funds under Delaware law and the amount to
be paid is less than or equal to the Available Dividend Amount for circle.com.

At any time within one year after completing any dividend or partial
redemption of the sort referred to above, we will have the right to issue
shares of SNC stock in exchange for outstanding shares of circle.com stock at a
10% premium (based on the average Market Value of SNC stock as compared to the
average Market

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Value of circle.com stock during the 20 consecutive Trading Day period ending
on the 5th Trading Day immediately preceding the date on which Snyder
Communications mails the notice of exchange to holders of circle.com stock). In
determining whether to effect this exchange following a dividend or partial
redemption, we would, in addition to other matters, consider whether the
remaining assets of circle.com continue to constitute a viable business, the
number of shares of circle.com stock remaining issued and outstanding, the per
share market price of circle.com stock and the ongoing cost of continuing to
have a separate series of common stock outstanding.

Certain Definitions

The following terms used in this document have the meanings specified in our
amended and restated certificate of incorporation and are set forth below:

"All or Substantially All of the Assets" of circle.com means assets that
represent at least 80% of the then-current Fair Value of the assets of
circle.com.

"circle.com" means

(1) Internet professional services business of Snyder Communications,
including all of the businesses, assets and liabilities of Snyder
Communications and its subsidiaries that the board has, as of the date on
which our amended and restated certificate of incorporation becomes
effective under Delaware law, allocated to circle.com,

(2) any assets or liabilities acquired or incurred by Snyder
Communications or any of its subsidiaries after the effective date of the
recapitalization in the ordinary course of business and attributable to
circle.com,

(3) any business, assets or liabilities acquired or incurred by Snyder
Communications or any of its subsidiaries after the effective date of the
recapitalization that the board has specifically allocated to circle.com or
that Snyder Communications otherwise allocates to circle.com in accordance
with policies established from time to time by the board, and

(4) the rights and obligations of circle.com under any inter-group debt
deemed to be owed to or by circle.com (as those rights and obligations are
defined in accordance with policies established from time to time by the
board); provided that:

(a) Snyder Communications may re-allocate assets from one group to
the other group in return for other assets or services rendered by that
other group in the ordinary course of business or in accordance with
policies established by the board from time to time; and

(b) if Snyder Communications transfers cash, other assets or
securities to holders of circle.com stock as a dividend or other
distribution on circle.com stock (other than a dividend or distribution
payable in shares of circle.com stock), or as payment in a redemption
of circle.com stock effected as a result of a sale of All or
Substantially All of the Assets of circle.com, then the board shall re-
allocate from circle.com to SNC cash, other assets having a Fair Value
equal to the aggregate Fair Value of the cash, assets or other
securities so transferred times a fraction, the numerator of which
shall equal the Number of Shares Issuable with Respect to SNC's
Retained Interest in circle.com on the record date for the dividend or
distribution, or on the date of the redemption, and the denominator of
which shall equal the number of shares of circle.com stock outstanding
on that date.

"Fair Value" means

(1) in the case of cash, the amount of cash,

(2) in the case of capital stock that has been Publicly Traded for a
period of at least 15 months, the Market Value of the stock, and

(3) in the case of other assets or securities, the fair market value of
the assets or securities as the board shall determine in good faith.

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Any good faith board determination of Fair Value shall be conclusive and
binding on all stockholders.

"Market Capitalization" of either series of common stock on any date
means the Market Value of a share of that series on that date times the
number of shares of that series outstanding on such date. Shares issuable
with respect to SNC's retained interest in circle.com are not considered to
be outstanding unless and until they are in fact issued to third parties.

"Market Value" of a share of any class or series of capital stock on any
Trading Day generally means the average of the high and low reported sales
prices of a share of that class or series on that Trading Day, subject to
certain exceptions as described in our amended and restated certificate of
incorporation.

The "Net Proceeds" of the sale of All or Substantially All of the Assets
of circle.com means the positive amount, if any, remaining from the gross
proceeds of the sale after any payment of, or reasonable provision (as
determined in good faith by the board, which determination will be
conclusive and binding on all stockholders) for,

(1) any taxes payable by Snyder Communications in respect of the sale,

(2) any taxes payable by Snyder Communications in respect of any
resulting dividend or redemption,

(3) any transaction costs, including, without limitation, any legal,
investment banking and accounting fees and expenses, and

(4) any liabilities (contingent or otherwise) of, attributed to or
related to, circle.com, including, without limitation, any liabilities for
deferred taxes, any indemnity or guarantee obligations which are
outstanding or incurred in connection with the sale or otherwise, any
liabilities for future purchase price adjustments and any obligations with
respect to outstanding securities (other than common stock) attributed to
circle.com.

"Number of Shares Issuable with Respect to SNC's Retained Interest in
circle.com" means the number of shares of circle.com stock that Snyder
Communications may issue for the account of SNC in respect of SNC's
Retained Interest.

"Proportionate Interest" of holders of circle.com stock in the Net
Proceeds of a sale of All or Substantially All of the Assets of circle.com
(or in the outstanding shares of common stock of any subsidiaries holding
circle.com's assets and liabilities) means the amount of the Net Proceeds
(or the number of such shares) times the number of shares of circle.com
stock outstanding divided by the Total Number of Notional circle.com Shares
Deemed Outstanding.

"Publicly Traded" with respect to any security means (1) registered under
Section 12 of the Securities Exchange Act of 1934 and (2) listed for
trading on the NYSE (or any other national securities exchange registered
under Section 7 of the Exchange Act (or any successor provision of law)) or
listed on the Nasdaq National Market System (or any successor market
system).

"Related Business Transaction" means a sale of All or Substantially All
of the Assets of circle.com in a transaction or series of related
transactions that result in Snyder Communications receiving in
consideration of those assets primarily equity securities (including,
without limitation, capital stock, debt securities convertible into or
exchangeable for equity securities or interests in a general or limited
partnership or limited liability company, without regard to the voting
power or other management or governance rights associated therewith) of any
entity which:

(1) acquires such properties or assets or succeeds (by merger, formation
of a joint venture or otherwise) to the business conducted with such
properties or assets or controls such acquiror or successor, and

(2) is primarily engaged or proposes to engage primarily in one or more
businesses similar or complementary to the businesses conducted by
circle.com prior to such sale, as determined by the Board of Directors.

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"Retained Interest Percentage" equals the Number of Shares Issuable with
Respect to SNC's Retained Interest in circle.com divided by the Total
Number of Notional circle.com Shares Deemed Outstanding (expressed as a
percentage).

"SNC" means

(1) all of the businesses, assets and liabilities of Snyder
Communications and its subsidiaries, other than the businesses, assets and
liabilities that are part of circle.com,

(2) the rights and obligations of SNC under any inter-group debt deemed
to be owed to or by SNC (as such rights and obligations are defined in
accordance with policies established from time to time by the board), and

(3) a proportionate interest in circle.com (after giving effect to any
options, preferred stock, other securities or debt issued or incurred by
Snyder Communications and attributed to circle.com) equal to the Retained
Interest Percentage; provided that:

(b) if Snyder Communications transfers cash, other assets or
securities to holders of circle.com stock as a dividend or other
distribution on shares of circle.com stock (other than a dividend or
distribution payable in shares of circle.com stock), or as payment in a
redemption of circle.com stock effected as a result of a sale of All or
Substantially All of the Assets of circle.com, then the board shall re-
allocate from circle.com to SNC cash or other assets having a Fair
Value equal to the aggregate Fair Value of the cash, other assets or
securities so transferred times a fraction, the numerator of which
shall equal the Number of Shares Issuable with Respect to SNC's
Retained Interest in circle.com on the record date for such dividend or
distribution, or on the date of such redemption, and the denominator of
which shall equal the number of shares of circle.com stock outstanding
on such date.

"Total Number of Notional circle.com Shares Deemed Outstanding" means the
number of shares of circle.com stock outstanding plus the Number of Shares
Issuable with Respect to SNC's Retained Interest in circle.com.

"Trading Day" means each weekday on which the relevant security (or, if
there are two relevant securities, each relevant security) is traded on the
principal national securities exchange on which it is listed or admitted to
trading or on the Nasdaq National Market System or, if such security is not
listed or admitted to trading on a national securities exchange or quoted
on the Nasdaq National Market System, traded in the principal over-the-
counter market in which it trades.

We are not required to effect a dividend, redemption or conversion if the
disposition is:

(1) in connection with our dissolution, liquidation or winding up and the
distribution of our assets to stockholders;

(2) a split-off of circle.com to holders of circle.com stock as described
under "--Optional Exchange for a Stock of a Subsidiary";

(3) made to any person or entity controlled by us, as determined by our
board of directors; or

(4) in a Related Business Transaction.

Notices if Disposition of circle.com Assets Occurs

Not later than the 10th Trading Day after the consummation of a disposition,
we will announce publicly by press release:

(1) the estimated net proceeds of the disposition;

(2) the number of shares outstanding of circle.com stock;

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(3) the number of shares of circle.com stock into or for which
convertible securities are then convertible, exchangeable or exercisable
and the conversion, exchange or exercise price of the shares; and

(4) the Number of Shares Issuable with Respect to SNC's Retained Interest
in circle.com.

Not earlier than the 26th Trading Day and not later than the 30th Trading
Day after the consummation of the disposition, we will announce publicly by
press release whether we will pay a dividend, redeem shares of circle.com
stock with the net proceeds of the disposition or convert the shares of
circle.com stock into SNC stock.

In addition, we would be required, not more than 30 Trading Days after the
consummation of the disposition and not less than 10 Trading Days before the
applicable payment date, redemption date or exchange date, to send a notice by
first-class mail, postage prepaid, to holders of the relevant series of common
stock at their addresses as they appear on our transfer books.

. If we determine to pay a special dividend, we would be required to
specify in the notice (1) the record date for the dividend, (2) the
payment date of the dividend (which cannot be more than 85 Trading Days
after the consummation of the dividend) and (3) the aggregate amount and
type of property to be paid in the dividend (and the approximate per
share amount of the dividend).

. If we determine to undertake a redemption, we would be required to
specify in the notice (1) the date of redemption (which cannot be more
than 85 Trading Days after consummation of the redemption), (2) the
aggregate amount and type of property to be paid as a redemption price
(and the approximate per share amount of the redemption price), (3) if
less than all shares of the relevant series of common stock are to be
redeemed, the number of shares to be redeemed and (4) the place or
places where certificates for shares of the series of common stock to be
redeemed, properly endorsed or assigned for transfer (unless we waive
that requirement), should be surrendered in return for delivery of the
cash, securities or other property to be paid by Snyder Communications
in the redemption.

. If we determine to undertake an exchange, we would be required to
specify in the notice (1) the date of exchange (which cannot be more
than 85 Trading Days after the consummation of the exchange), (2) the
number of shares of the other series of common stock to be issued in
exchange for each outstanding share of the series of common stock to be
exchanged and (3) the place or places where certificates for shares of
the series of common stock to be exchanged, properly endorsed or
assigned for transfer (unless we waive that requirement), should be
surrendered in return for delivery of the other series of common stock
to be issued by Snyder Communications in the exchange.

If we determine to complete any exchange described under "--Conversion of
circle.com Stock or SNC Stock at Our Option at Any Time" or "--Optional
Exchange For Stock of a Subsidiary," we would be required, between 10 to 30
Trading Days before the exchange date, to send a notice by first-class mail,
postage prepaid, to holders of the relevant series of common stock at their
addresses as they appear on our transfer books, specifying:

(1) the exchange date and the other terms of the exchange; and

(2) the place or places where certificates for shares of the series of
common stock to be exchanged, properly endorsed or assigned for transfer
(unless we waive that requirement), should be surrendered for delivery of
the stock to be issued or delivered by Snyder Communications in the
exchange.

Neither the failure to mail any required notice to any particular holder nor
any defect in the notice would affect the sufficiency of the notice with
respect to any other holder or the validity of any dividend, redemption or
exchange.

Conversion of circle.com Stock or SNC Stock at Our Option at Any Time

We will have the right at any time to declare that each outstanding share of
circle.com stock shall be exchanged, as of the applicable exchange date, for a
number of fully paid and nonassessable shares of SNC stock at a conversion
ratio equal to the ratio of:

(1) the 20-day average market price of a share of SNC stock for the 20
Trading Days immediately preceding the 5th day before we make this
declaration; to

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(2) the premium multiplied by the 20-day average market price of the
circle.com stock for the same period.

The premium will initially be % for exchanges occurring in the first
calendar quarter after issuance of the circle.com stock, and will decline
thereafter by one percentage point for each succeeding quarter until the
eleventh succeeding quarter. Upon the eleventh succeeding quarter, the premium
will be fixed at %.

Similarly, we will have the right to convert all outstanding shares of SNC
stock to shares of circle.com stock at a conversion ratio equal to the ratio
of:

(1) the 20-day average market price of a share of circle.com stock for
the 20 Trading Days immediately preceding the 5th day before we make this
election; to

(2) % of the 20-day average market price of the SNC stock for the same
period.

These provisions allow us the flexibility to recapitalize the two classes of
common stock into one class of common stock that would, after the
recapitalization, represent an equity interest in all of our businesses. The
optional conversion could be exercised at any future time if our board of
directors determines that, under the facts and circumstances then existing, an
equity structure consisting of two classes of common stock was no longer in the
best interests of all of our stockholders. This exchange could, however, be
exercised at a time that is disadvantageous to the holders of one of the
classes of common stock. See "Risk Factors."

Conversion of circle.com Stock or SNC Stock Upon an Adverse Tax Event

We will have the right upon the occurrence of an adverse tax event to declare
that each outstanding share of circle.com stock shall be exchanged, as of the
applicable exchange date, for a number of fully paid and nonassessable shares
of SNC stock at a conversion ratio equal to the ratio of:

(1) the 20-day average market price of a share of SNC stock for the 20
Trading Days immediately preceding the 5th day before we make this
declaration; to

(2) the 20-day average market price of a share of circle.com stock for
the same period.

Similarly, we will have the right upon the occurrence of an adverse tax event
to declare that each outstanding share of SNC stock shall be exchanged, as of
the applicable exchange date, for a number of fully paid and nonassessable
shares of circle.com stock at a conversion ratio equal to the ratio of:

(1) the 20-day average market price of a share of circle.com stock for
the 20 Trading Days immediately preceding the 5th day before we make this
declaration; to

(2) the 20-day average market price of a share of SNC stock for the same
period.

An adverse tax event shall mean our receipt of an opinion of tax counsel to
the effect that, as a result of any amendment to, or change in the laws or
regulations of the United States or any of its political subdivisions or taxing
authorities (including any announced proposed change by an administrative
agency), or as a result of any official or administrative pronouncement or
action or judicial decision interpreting or applying such laws or regulations,
it is more likely than not that for United States federal income tax purposes:

(1) we, our subsidiaries or affiliates, or any of our successors or
stockholders are or, at any time in the future, will be subject to tax upon
the issuance of shares of either SNC stock or circle.com stock or

(2) either SNC stock or circle.com stock is not or, at any time in the
future, will not be treated solely as stock of our company.

For purposes of rendering such tax opinion, tax counsel shall assume that any
administrative proposals will be adopted as proposed. However, in the event a
change in law is proposed, tax counsel shall render an opinion only in the
event of enactment.

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Optional Exchange for Stock of a Subsidiary

At any time at which all of the assets and liabilities of circle.com (and no
other assets or liabilities of Snyder Communications or any of its
subsidiaries) are held directly or indirectly by one or more wholly-owned
subsidiaries of Snyder Communications, we will have the right to deliver to
holders of circle.com stock their Proportionate Interest in all of the
outstanding shares of the common stock of the subsidiaries holding the assets
and liabilities of circle.com in exchange for all of the outstanding shares of
circle.com stock.

If the Number of Shares Issuable with Respect to SNC's Retained Interest in
circle.com is greater than zero (so that less than all of the shares of common
stock of the subsidiaries holding the assets and liabilities of circle.com are
being delivered to the holders of circle.com stock), we may retain the
remaining shares of circle.com stock of those subsidiaries or distribute those
shares as a dividend on SNC stock.

These provisions are intended to give us increased flexibility with respect
to splitting-off the assets of circle.com by transferring its assets to one or
more wholly-owned subsidiaries and redeeming the shares of circle.com in
exchange for stock of that subsidiary or subsidiaries. This type of redemption
could be authorized by our board of directors at any time in the future if it
determines that, under the facts and circumstances then existing, an equity
structure comprised of two classes of common stock is no longer in the best
interests of all of our stockholders as a whole.

General Dividend, Exchange and Redemption Provisions

Selection of Shares for Redemption. If less than all of the outstanding
shares of a class of common stock are to be redeemed, we will redeem those
shares proportionately from among the holders of outstanding shares of the
common stock to be redeemed or by any method as may be determined by our board
of directors to be equitable.

Fractional Interests; Transfer Taxes. We will not be required to issue or
deliver fractional shares to any holder of common stock upon any exchange,
redemption, dividend or other distribution described above. If there are
fractional shares to be issued or distributed to any holder, we will, if the
fractional shares or securities are not issued or distributed to the holder,
pay cash in respect of the fractional shares or securities in an amount equal
to the Fair Value of the securities on the 5th Trading Day prior to the date
the payment is to be made, without interest.

From and after the date set for any exchange or redemption, all rights of a
holder of shares of common stock that were exchanged or redeemed would cease
except for the right, upon surrender of the certificates representing those
shares, to receive the cash, securities or other property for which those
shares were exchanged or redeemed, together with any fractional payment as
provided above, in each case without interest. If the holder was a holder of
record as of the close of business on the record date for a dividend not yet
paid, the holder will also have the right to receive the dividend. A holder of
shares of common stock being exchanged would not be entitled to receive any
dividend or other distribution with respect to shares of the other series of
common stock until after the shares being exchanged are surrendered as
contemplated above. Upon surrender, we would pay to the holder the amount of
any dividends or other distributions without interest, which previously became
payable. After the date set for any exchange, we would, however, be entitled to
treat the certificates for shares of common stock being exchanged that were not
yet surrendered for exchange as evidencing the ownership of the number of whole
shares of the other series of common stock for which the share of common stock
should have been exchanged, regardless of the failure to surrender the
certificates.

We will pay all documentary, stamp or similar issue or transfer taxes that
may be payable in respect of the issue or delivery of any shares of capital
stock and/or other securities on conversion or redemption of shares. We will
not, however, be required to pay any tax that might be payable in respect of
any transfer involved in the issue or delivery of any shares of capital stock
and/or other securities in a name other than that in which the shares so
exchanged or redeemed were registered. We will not issue or deliver shares as
described in the

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previous sentence unless and until the person requesting the issue pays to
Snyder Communications the amount of any tax or establishes to our satisfaction
that the tax has been paid.

We may, subject to applicable law, establish other rules, requirements and
procedures to facilitate any dividend, redemption or exchange contemplated as
described above as the board may determine to be appropriate under the
circumstances.

Voting Rights

Currently, holders of our existing common stock have one vote per share on
all matters submitted to stockholders.

The amended and restated certificate of incorporation will provide that the
holders of SNC stock and circle.com stock will vote together as a single class
on all matters as to which common stockholders are generally entitled to vote,
except as described below. On all matters as to which both classes of common
stock would vote together as a single class,

(1) each outstanding share of SNC stock will have one vote per share; and

(2) each outstanding share of circle.com stock will have the vote per
share determined from time to time as described in the next section.

Determination of Votes per Share for circle.com Stock. From the period
beginning on the date of the issuance of the circle.com stock through the first
calendar quarter in which the stock is initially issued, a share of circle.com
stock will have the vote per share determined by the ratio of:

(1) the average Market Capitalization of the circle.com stock for the
period beginning on the date of initial issuance of the stock through the
record date for determining the stockholders entitled to vote; to

(2) the average Market Capitalization of the SNC stock over the same
period.

From the period beginning after the end of the first calendar quarter in
which the circle.com stock is initially issued and continuing to the end of
that calendar year, a share of circle.com stock will have the vote per share
determined each quarter, as of the first day of each quarter, by the ratio of:

(1) the average Market Capitalization of the circle.com stock over the
trading days of the previous quarter or quarters since the initial issuance
of the stock; to

(2) the average Market Capitalization of the SNC stock over the same
period.

The vote per share calculated as provided in the immediately preceding sentence
shall remain fixed for the remainder of the quarter in which it is calculated.

After the end of the calendar year in which the circle.com stock is initially
issued, the circle.com stock will have the vote per share determined annually,
as of the first day of each year, by the ratio of:

(1) the average Market Capitalization of the circle.com stock over the
trading days of the previous four quarters; to

(2) the average Market Capitalization of the SNC stock over the same
period.

The vote per share calculated as provided in the immediately preceding sentence
shall remain fixed for the remainder of the year in which it is calculated.

Accordingly, the relative per share voting rights of the circle.com stock and
the SNC stock will fluctuate depending on changes in the relative market values
of those classes of common stock.

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We expect that, upon completion of the recapitalization, the SNC stock will
have a substantial majority of the voting power because we expect that the
aggregate market value of the outstanding shares of SNC stock will be
substantially greater than the aggregate market value of the outstanding shares
of circle.com stock.

We will set forth the number of outstanding shares of SNC stock and
circle.com stock in our Annual Report on Form 10-K and our Quarterly Reports on
Form 10-Q filed under the Securities Exchange Act of 1934. We will disclose in
any proxy statement for a stockholders' meeting the number of outstanding
shares and per share voting rights of each class of common stock.

General Voting Rights. The holders of SNC stock and circle.com stock will not
have any rights to vote separately as a class on any matter coming before our
stockholders, except as described in this section and under Delaware law.

The holders of circle.com stock, voting as a separate class, shall be
entitled to approve by the affirmative vote of the holders of a majority of the
outstanding shares (1) any amendment, alteration or repeal of any provision of
our amended and restated certificate of incorporation which adversely affects
the rights, powers or privileges of the circle.com stock and (2) the payment of
a dividend or distribution on the SNC stock in shares of circle.com stock or
any security convertible into or exchangeable or exercisable for shares of
circle.com stock. When the circle.com stock votes as a separate class, each
share shall be entitled to one vote.

The holders of SNC stock, voting as a separate class, shall be entitled to
approve by the affirmative vote of the holders of a majority of the outstanding
shares (1) any amendment, alteration or repeal of any provision of our amended
and restated certificate of incorporation which adversely affects the rights,
powers or privileges of the SNC stock and (2) the payment of a dividend or
distribution on the circle.com stock in shares of SNC stock or any security
convertible into or exchangeable or exercisable for shares of SNC stock.

Any increase in the number of authorized shares of SNC stock or circle.com
stock shall be subject to approval by both:

(1) the affirmative vote of the holders of a majority of the voting power
of both the SNC stock and the circle.com stock; and

(2) the affirmative vote of the holders of a majority of the shares of
SNC stock or circle.com stock, as applicable, outstanding voting as a
separate class.

Liquidation Rights

Currently, in the event of our liquidation, dissolution or termination, after
payment, or provision for payment, of our debts and other liabilities and the
payment of full preferential amounts to which the holders of any preferred
stock are entitled, holders of existing common stock are entitled to share
equally in our remaining net assets.

Under the amended and restated certification of incorporation, in the event
of our liquidation, dissolution or winding up, after payment or provision for
payment of the debts and other liabilities and full preferential amounts to
which the holders of any preferred stock are entitled, regardless of the group
to which the shares of preferred stock were attributed, the holders of SNC
stock and circle.com stock will be entitled to receive our assets remaining for
distribution to holders of common stock on a per share basis in proportion to
the liquidation units per share of that class.

Each share of SNC stock will have one liquidation unit. Each share of
circle.com stock will have of a liquidation unit.

No holder of SNC stock will have any special right to receive specific assets
of SNC and no holder of circle.com stock will have any special right to receive
specific assets of circle.com in the case of our dissolution, liquidation or
winding up.

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If we subdivide or combine the outstanding shares of either class of common
stock or declare a dividend or other distribution of shares of either class of
common stock to holders of that class of common stock, the number of
liquidation units of either class will be appropriately adjusted, as determined
by our board of directors, to avoid any dilution in the aggregate, relative
liquidation rights of any class of common stock.

Neither a merger nor consolidation of Snyder Communications into or with any
other corporation, nor any sale, transfer or lease of all or any part of our
assets, will, alone, be deemed a liquidation or winding up of Snyder
Communications, or cause the dissolution of Snyder Communications, for purposes
of these liquidation provisions.

SNC's Retained Interest in circle.com

The Number of Shares Issuable With Respect to SNC's Retained Interest in
circle.com shall initially be that number of shares of circle.com stock whose
value equals 20% of the equity value attributed to circle.com.

In this document, the proportional interest in circle.com represented at any
time by the outstanding shares of circle.com stock is the "Outstanding Interest
Percentage." At the time of the recapitalization, the Outstanding Interest
Percentage will be approximately 80%. The remaining proportional interest in
circle.com, represented by SNC's retained interest in circle.com, is
represented by the "Retained Interest Percentage." At the time of the
recapitalization, the Retained Interest Percentage will be approximately 20%.
At any time, the Outstanding Interest Percentage equals the number of shares of
circle.com outstanding divided by the Total Number of Notional circle.com
Shares Deemed Outstanding (expressed as a percentage). The Outstanding Interest
Percentage can also be expressed as follows:

Number of shares of circle.com stock outstanding
------------------------------------------------
Total Number of Notional circle.com Shares Deemed Outstanding

The Retained Interest Percentage equals the Number of Shares Issuable with
Respect to SNC's Retained Interest in circle.com divided by the Total Number of
Notional circle.com Shares Deemed Outstanding (expressed as a percentage). The
Retained Interest Percentage can also be expressed as follows:

Number of Shares of Issuable with Respect
to SNC's Retained Interest in circle.com
---------------------------------
Total Number of Notional circle.com
Shares Deemed Outstanding

The sum of the Outstanding Interest Percentage and the Retained Interest
Percentage will always equal 100%.

Attribution of Issuances of circle.com Stock

Whenever we decide to issue shares of circle.com stock, we would determine in
our sole discretion, whether to attribute that issuance, and the proceeds of
the issuance:

. to SNC in respect of its retained interest in circle.com, in a manner
analogous to a secondary offering of common stock of a subsidiary owned
by a corporate parent; or

. to circle.com, in a manner analogous to a primary offering of common
stock.

If we issue any shares of circle.com stock and attribute that issuance, and
the proceeds of the issuance, to SNC in respect of its retained interest in
circle.com,

. the Number of Shares Issuable with Respect to SNC's Retained Interest in
circle.com would be reduced by the number of shares so issued,

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. the number of outstanding shares of circle.com stock would be increased
by the same amount,

. the Total Number of Notional circle.com Shares Deemed Outstanding would
remain unchanged,

. the Retained Interest Percentage would be reduced, and

. the Outstanding Interest Percentage would be correspondingly increased.

If we instead attribute that issuance, and the proceeds of the issuance, to
circle.com,

. the Number of Shares Issuable with Respect to SNC's Retained Interest in
circle.com would remain unchanged,

. the number of outstanding shares of circle.com stock and the Total
Number of Notional Shares of circle.com Deemed Outstanding would be
increased by the number of shares so issued,

. the Retained Interest Percentage would be reduced, and

. the Outstanding Interest Percentage would be correspondingly increased.

Issuances of circle.com Stock as Distributions on SNC Stock

Subject to stockholder approval, we may issue shares of circle.com stock as a
distribution on SNC stock, although we do not currently intend to do so. If we
did so, we would attribute that distribution to SNC in respect of its retained
interest in circle.com. As a result,

. the Number of Shares Issuable with Respect to SNC's Retained Interest in
circle.com would be reduced by the number of shares so distributed,

. the number of outstanding shares of circle.com stock would be increased
by the same amount,

. the Total Number of Notional Shares of circle.com Deemed Outstanding
would remain unchanged,

. the Retained Interest Percentage would be reduced; and

. the Outstanding Interest Percentage would be correspondingly increased.

If instead we issued shares of circle.com stock as a distribution on circle.com
stock, we would attribute that distribution to circle.com, in which case we
would proportionately increase the Number of Shares Issuable with Respect to
SNC's Retained Interest in circle.com. As a result,

. the Number of Shares Issuable with Respect to SNC's Retained Interest in
circle.com and the Total Number of Notional Shares of circle.com Deemed
Outstanding would be increased by the same percentage as the number of
outstanding shares of circle.com is increased; and

. the Retained Interest Percentage and the Outstanding Interest Percentage
would remain unchanged.

Dividends on circle.com Stock

At the time of any dividend on the outstanding shares of circle.com stock
(including any dividend required as a result of a disposition of All or
Substantially All of the Assets of circle.com, but excluding any dividend
payable in circle.com stock), we will credit to SNC, and charge against
circle.com, a corresponding amount in respect of SNC's retained interest in
circle.com. Specifically, the corresponding amount will equal:

(1) the aggregate amount of such dividend, times

(2) the Retained Interest Percentage.

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Repurchases of circle.com Stock

If we decide to repurchase shares of circle.com stock, we would determine, in
our sole discretion, whether to attribute that repurchase, including its cost,
to SNC, in a manner analogous to a purchase of common stock of a subsidiary by
a corporate parent, or to circle.com, in a manner analogous to an issuer
repurchase. If we repurchase shares of circle.com stock and attribute that
repurchase, including its cost, to SNC:

. the Number of Shares Issuable with Respect to SNC's Retained Interest in
circle.com would be increased by the number of shares so purchased;

. the number of outstanding shares of circle.com stock would be decreased
by the same amount;

. the Total Number of Notional Shares of circle.com Deemed Outstanding
would remain unchanged;

. the Retained Interest Percentage would be increased; and

. the Outstanding Interest Percentage would be correspondingly decreased.

If we instead attribute that repurchase, including its cost, to circle.com:

. the Number of Shares Issuable with Respect to SNC's Retained Interest in
circle.com would remain unchanged;

. the number of outstanding shares of circle.com stock and the Total
Number of Notional Shares of circle.com Deemed Outstanding would be
decreased by the number of shares so repurchased;

. the Retained Interest Percentage would be increased; and

. the Outstanding Interest Percentage would be correspondingly decreased.

Transfers of Cash or Other Property Between SNC and circle.com

We may, in our sole discretion, determine to transfer cash or other property
of circle.com to SNC in return for a decrease in SNC's retained interest in
circle.com, in a manner analogous to a return of capital, or to transfer cash
or property of SNC to circle.com in return for an increase in SNC's retained
interest in circle.com, in a manner analogous to a capital contribution. If we
determine to transfer cash or other property of circle.com to SNC in return for
a decrease in SNC's retained interest in circle.com:

. the Number of Shares Issuable with Respect to SNC's Retained Interest in
circle.com and the Total Number of Notional Shares of circle.com Deemed
Outstanding would be decreased by an amount equal to the Fair Value of
the cash or other property divided by the Market Value of a share of the
circle.com stock on the day of transfer;

. the number of outstanding shares of circle.com stock would remain
unchanged;

. the Retained Interest Percentage would be reduced; and

. the Outstanding Interest Percentage would be correspondingly increased.

If we instead determine to transfer cash or other property of SNC to
circle.com in return for an increase in SNC's retained interest in circle.com:

. the Number of Shares Issuable with Respect to SNC's Retained Interest in
circle.com and the Total Number of Notional Shares of circle.com Deemed
Outstanding would be increased by an amount equal to the Fair Value of
the cash or other property divided by the Market Value of a share of the
circle.com stock on the day of transfer;

. the number of outstanding shares of circle.com stock would remain
unchanged;

. the Retained Interest Percentage would be increased; and

. the Outstanding Interest Percentage would be correspondingly decreased.

55
<PAGE>

We may not attribute issuances of circle.com stock to SNC, transfer cash or
other property of circle.com stock to SNC in return for a decrease in its
retained interest in circle.com or take any other action to the extent that
doing so would cause the Number of Shares Issuable with Respect to SNC's
Retained Interest in circle.com to decrease below zero.

Preemptive Rights

Under Delaware law, stockholders do not have preemptive rights unless
specifically granted in the certificate of incorporation. The amended and
restated certificate of incorporation does not grant the holders of the SNC
stock or the holders of the circle.com stock any preemptive rights or any
rights to convert their shares into any other securities of Snyder
Communications.

Certain Anti-Takeover Provisions of Delaware Law and the Amended and Restated
Certificate of Incorporation and By-Laws

The following discussion concerns certain provisions of Delaware law, the
amended and restated certification of incorporation and our by-laws that could
be viewed as having the effect of discouraging an attempt to obtain control of
Snyder Communications. These provisions are similar in many respects to those
currently applicable to us.

Delaware Law

Section 203 of the General Corporation Law. Under certain circumstances,
Section 203 of the Delaware General Corporation Law limits the ability of an
"interested stockholder" to effect various business combinations with Snyder
Communications for a three-year period following the time that that stockholder
became an interested stockholder. An "interested stockholder" is defined as a
holder of more than 15% of the outstanding voting stock.

An interested stockholder may engage in a business combination transaction
with Snyder Communications within the three-year period only if:

. our board of directors approved the transaction before the stockholder
became an interested stockholder or approved the transaction in which
the stockholder became an interested stockholder;

. the interested stockholder acquired at least 85% of the voting stock in
the transaction in which it became an interested stockholder; or

. our board of directors and the holders of shares entitled to cast two-
thirds of the votes entitled to be cast by all of the outstanding voting
shares held by all disinterested stockholders approve the transaction.

Special Meetings. Under Delaware law, unless the certificate of incorporation
or the by-laws provide otherwise, stockholders are not permitted to call a
special meeting of the stockholders. The amended and restated certificate of
incorporation and the by-laws do not permit stockholders to call a special
meeting.

Amended and Restated Certificate of Incorporation and By-Laws

Authorized Shares. The amended and restated certificate of incorporation will
provide that we may from time to time issue shares of preferred stock in one or
more series, the terms of which will be determined by our board of directors,
and common stock of either class. We will not solicit approval of our
stockholders unless our board of directors believes that approval is advisable
or is required by stock exchange, Nasdaq National Market System regulations or
Delaware law. This could enable our board of directors to issue shares to
persons friendly to current management which would render more difficult or
discourage an attempt to obtain control of Snyder Communications by means of a
merger, tender offer, proxy contest or otherwise and protect the

56
<PAGE>

continuity of our management. These additional shares also could be used to
dilute the stock ownership of persons seeking to obtain control of our company.

Material Federal Income Tax Consequences

We have received an opinion from our counsel, Weil, Gotshal & Manges LLP,
that, for federal income tax purposes, neither our issuance nor your receipt of
SNC stock and circle.com stock pursuant to the recapitalization proposal should
be treated as taxable events to us or to you, except with respect to any cash
you receive in lieu of a fractional share of circle.com. We will not apply for
an advance tax ruling from the Internal Revenue Service because the Service has
announced that it will not issue advance rulings on the classification of stock
with characteristics similar to those of the SNC stock and the circle.com
stock.

The following general discussion summarizes the federal income tax
consequences of the recapitalization proposal. The discussion is based on the
Internal Revenue Code of 1986, Treasury Department regulations, published
positions of the Internal Revenue Service, and court decisions now in effect,
all of which are subject to change possibly with retroactive effect. In
particular, Congress could enact legislation affecting the treatment of stock
with characteristics similar to the SNC stock and the circle.com stock, or the
Treasury Department could change the current law in future regulations,
including regulations issued pursuant to its authority under Section 337(d) of
the Code. Any future legislation or regulations could be enacted or promulgated
to apply retroactively to the recapitalization proposal. For example, a recent
proposal by the Clinton Administration would impose a corporate level tax on
the issuance of stock similar to the SNC stock or the circle.com stock. If this
proposal is enacted, Snyder Communications could be subject to tax on an
issuance of SNC stock or circle.com stock after the date of enactment. Snyder
Communications cannot predict, however, whether the proposal will be enacted by
Congress and, if enacted, whether it will be in the form proposed by the
Clinton Administration.

This discussion addresses only those stockholders who hold their existing
common stock and would hold their SNC stock and circle.com stock as capital
assets within the meaning of Section 1221 of the Code and is included for
general information only. It does not discuss all aspects of federal income
taxation that may be relevant to a particular stockholder in light of his or
her personal tax circumstances and does not apply to certain types of
stockholders which may be subject to special treatment under the federal income
tax laws, including, without limitation, tax-exempt organizations, S
corporations and other pass-through entities, mutual funds, small business
investment companies, regulated investment companies, insurance companies and
other financial institutions, broker-dealers, and persons that hold their
existing common stock as part of a straddle, hedging or conversion transaction.
Also, neither foreign, state or local tax consequences nor estate and gift tax
considerations are discussed. Stockholders should consult their own tax
advisers with regard to the application of the federal income tax laws to their
particular situation, as well as to the applicability and effect of any state,
local or foreign tax laws to which they may be subject.

Tax Implications of the Recapitalization Proposal to the Stockholders

Receipt of SNC Stock and circle.com Stock. In our counsel's opinion, the SNC
stock and the circle.com stock should, for federal income tax purposes, be
treated as common stock of Snyder Communications. Accordingly, a stockholder
should not recognize any gain or loss on the receipt of SNC stock and
circle.com stock pursuant to the recapitalization, except with respect to any
cash you receive in lieu of a fractional share of circle.com. As a result, the
basis of the existing common stock held by a stockholder immediately before the
recapitalization would be allocated between the SNC stock and the circle.com
stock (including fractional share interests) received in proportion to the fair
market value of such SNC stock and circle.com stock, and the holding period of
the SNC stock and the circle.com stock would include the holding period of the
existing common stock. Stockholders will recognize gain or loss on the receipt
of cash instead of fractional shares of circle.com stock equal to the
difference between the cash received and the basis of the fractional shares
deemed received as described in the preceding sentence.

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<PAGE>

Stockholders of Snyder Communications should be aware that there are no
federal income tax regulations, court decisions, or published Internal Revenue
Service rulings bearing directly on the effect of the dividend and certain
other features of the SNC stock and the circle.com stock. In addition, the
Internal Revenue Service announced during 1987 that it was studying the federal
income tax consequences of stock which has certain voting and liquidation
rights in an issuing corporation but whose dividend rights are determined by
reference to the earnings and profits of a segregated portion of the issuing
corporation's assets, and would not issue any advance rulings regarding such
stock. The Internal Revenue Service has withdrawn this type of stock from its
list of matters under consideration and reiterated that it will not issue
advance rulings regarding this type of stock. The Internal Revenue Service may
take the position that the SNC stock or the circle.com stock represents
property other than stock of Snyder Communications. Were the SNC stock or the
circle.com stock treated as property other than stock of Snyder Communications,
its receipt might be treated as a fully taxable dividend to the stockholders in
an amount equal to the fair market value of the stock. While our counsel
recognizes that this matter cannot be viewed as free from doubt because there
is no conclusive authority dealing with the precise facts presented by the
recapitalization proposal, they believe that if the status of the SNC stock or
the circle.com stock as common stock of Snyder Communications for federal
income tax purposes were challenged, a court would agree with their
conclusions.

Sale or Exchange of SNC Stock or circle.com Stock. Upon the taxable sale or
exchange of SNC stock or circle.com stock, a stockholder will recognize gain or
loss. This gain or loss would be equal to the difference between (i) any cash
received plus the fair market value of any other consideration received and
(ii) the tax basis of the SNC stock or the circle.com stock, determined as
described above, that was sold or exchanged. Any gain or loss on the taxable
sale or exchange of the SNC stock or the circle.com stock would be a capital
gain or loss, assuming that the SNC stock or circle.com stock was held as a
capital asset by the stockholder on the date of the sale or exchange.

If Snyder Communications redeems the circle.com stock for shares of any
subsidiary of circle.com, it intends to do so in a manner that will be tax free
under Section 355 of the Code. If the redemption does not qualify under Section
355 of the Code, then (i) Snyder Communications could recognize gain on the
distribution of stock of any such subsidiary in an amount equal to the
difference between the fair market value of such stock distributed and Snyder
Communications' tax basis in such stock, and (ii) the holders of the circle.com
stock could, depending on their individual circumstances, either (a) recognize
gain or loss on the redemption in an amount equal to the difference between the
fair market value of the stock received and the stockholders' tax basis in
their shares being redeemed or (b) be treated as having received a taxable
dividend in an amount equal to the fair market value of the stock received.

Any conversion of one class of common stock into the other class of common
stock upon Snyder Communications' exercise of any of its rights to do so should
constitute a tax-free exchange to the exchanging stockholders, with the basis
and holding period in their newly received common stock measured by reference
to the basis and holding period of the stock they previously held.

United States Alien Holders. A United States Alien will not be subject to
United States federal income or withholding tax on any gain realized on the
taxable sale or exchange of SNC stock or circle.com stock unless (a) the gain
is derived from sources within the United States and the United States Alien is
an individual who was present in the United States for 183 days or more during
the taxable year, (b) such gain is effectively connected with a United States
trade or business of the United States Alien or (c) the stock sold or exchanged
is a "United States Real Property Interest" as defined in Section 897(c)(1) of
the Code at any time during the five years prior to the sale or exchange of the
stock or at any time during the time that the United States Alien held such
stock, whichever time is shorter. The SNC stock and the circle.com stock will
be a United States Real Property Interest only if, at any time during such
period, Snyder Communications is a "United States real property holding
corporation" as defined in Section 897(c)(2) of the Code and the United States
Alien directly

58
<PAGE>

or constructively owned more than 5% of that class of stock of Snyder
Communications being sold or exchanged. Snyder Communications believes that it
is not, has not been and will not become a "United States real property holding
corporation" for federal income tax purposes.

A "United States Alien" is any person who, for United States federal income
tax purposes, is a foreign corporation, a nonresident alien individual, a
nonresident alien fiduciary or a foreign estate or trust, or a foreign
partnership that includes as a member any of the foregoing persons.

Backup Withholding. Certain noncorporate holders of SNC stock or circle.com
stock may be subject to backup withholding at a rate of 31% on the payment of
dividends on their stock or cash in lieu of a fractional share of circle.com
stock. Backup withholding will apply only if the holder (i) fails to furnish
its Taxpayer Identification Number ("TIN") which, for an individual, would be
his or her Social Security number, (ii) furnishes an incorrect TIN, (iii) is
notified by the Service that it has failed properly to report payments of
interest or dividends, or (iv) under certain circumstances, fails to certify
under penalties of perjury that it has furnished a correct TIN and has not been
notified by the Internal Revenue Service that it is subject to backup
withholding for failure to report payments of interest or dividends.
Stockholders should consult their tax advisors regarding their qualification
for a tax exemption from backup withholding and the procedure for obtaining
such an exemption if applicable.

The amount of any backup withholding from a payment to a holder of SNC stock
or circle.com stock will be allowed as a credit against such stockholder's
federal income tax liability and may entitle such stockholder to a refund,
provided that the required information is furnished to the Service.

Tax Implications of the Recapitalization Proposal to Snyder Communications

In the opinion of our counsel, the SNC stock and the circle.com stock should
be common stock of Snyder Communications, and no gain or loss should be
recognized by Snyder Communications upon the issuance of such stock pursuant to
the recapitalization. If, however, either the SNC stock or the circle.com stock
were treated as property other than stock of Snyder Communications, Snyder
Communications may recognize gain on the issuance of the SNC stock or the
circle.com stock, as the case may be, pursuant to the recapitalization in an
amount equal to the difference between the fair market value of such stock and
its basis in such stock. If the SNC stock or the circle.com stock were treated
as stock of a subsidiary of Snyder Communications, SNC or circle.com, as the
case may be, could not be included in a single consolidated federal income tax
return with Snyder Communications, and any dividends paid or deemed to be paid
to Snyder Communications by such group could be taxable to Snyder
Communications.

Under the amended and restated certificate of incorporation, we may convert
the SNC stock or the circle.com stock into shares of the other class without
any premium if there are adverse federal income tax law developments. See
"Description of SNC Stock and circle.com Stock--Conversion of circle.com Stock
or SNC Stock at Our Option at Any Time." The proposal of the Clinton
Administration would be such an adverse development if it is implemented or
receives certain legislative action.

Stock Exchange Listing of the Common Stocks

We intend to seek to list the circle.com stock on the Nasdaq National Market
System under the symbol "CRCM." We will also seek to have the existing common
stock redesignated as SNC stock on the NYSE and to continue its listing on the
NYSE under the symbol "SNC."

Exchange Procedures

Upon completion of the recapitalization, your certificates representing
existing common stock will represent shares of SNC stock.

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<PAGE>

In the event that you are entitled to a fractional share of circle.com stock,
we will pay you, in lieu of issuing to you fractional shares, a cash amount
equal to the closing price of that fractional share on the date the
recapitalization is implemented. As soon as practicable after the
recapitalization, we will mail to you new certificates representing the whole
number of shares of SNC stock and circle.com stock to which you are entitled
and any cash payable in lieu of a fractional share of circle.com stock.

Stock Transfer Agent and Registrar

American Stock Transfer and Trust Company will continue to act as transfer
agent and registrar for the SNC stock and will act as transfer agent and
registrar for the circle.com stock upon the issuance of the circle.com stock.

Financial Advisors

Deutsche Bank Securities Inc. is acting as our financial advisor in
connection with the recapitalization proposal. Our financial advisor is also
assisting us in the solicitation of proxies for the special meeting. We will
pay to our financial advisor a fee of $3 million if you approve the
recapitalization proposal. We have agreed to reimburse the financial advisor
for certain of its reasonable out-of-pocket expenses and have agreed to
indemnify the financial advisor against certain liabilities, including
liabilities under the Securities Act.

Effect on Existing Options

If the recapitalization and related stock incentive plan proposal are
approved and implemented, outstanding awards previously granted under the stock
incentive plan based upon shares of existing common stock will be adjusted so
that each holder of an outstanding award will receive a corresponding award
based upon shares of either SNC stock, circle.com stock or both. Each
outstanding option to purchase a share of existing common stock held by a
circle.com employee will be converted into an option to purchase shares of
circle.com stock. Each outstanding option to purchase a share of existing
common stock held by an SNC employee will be converted into an option to
purchase shares of SNC stock. Each outstanding option to purchase a share of
existing common stock held by directors and certain corporate level officers
and employees will be converted into an option to purchase shares of SNC
stock and shares of circle.com stock. In each case, the exercise prices of
options will be adjusted in order to maintain the economic position of the
option holders in the recapitalization. The aggregate intrinsic value of the
options outstanding and the ratio of the exercise price per option to the
market value per share will not change. See "Proposal 2--Adoption of Amended
and Restated Stock Incentive Plan" for more information about how the
recapitalization will affect existing stock options.

No Dissenters' Rights

Under the General Corporation Law of the State of Delaware, you do not have
dissenters' rights in connection with the recapitalization proposal.

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<PAGE>

THE HEALTHCARE SERVICES BUSINESS SPIN-OFF

As we announced on June 23, 1999, we intend to separate our healthcare
services business and transfer it to a new company known as Snyder Healthcare
Services, Inc. The separation of our healthcare services business from our
direct marketing, advertising and communications business and our Internet-
based professional services business will be accomplished by transferring the
assets and liabilities of the healthcare services business to SHS and then
distributing shares of SHS common stock to you. If you are a stockholder of
record at the close of business on , 1999, you will receive one share of
SHS common stock for every two shares of existing common stock you hold. There
is currently no public market for the SHS common stock, but we are seeking to
list the SHS common stock on the Nasdaq National Market System.

After the distribution, SHS will operate the healthcare services business
currently conducted by our healthcare services division. The healthcare
services business we currently operate and which SHS will operate after the
distribution is currently provided to clients in the life sciences industry in
the U.S. and Europe through three units: the health products research group,
healthcare communications group and contract sales group.

We believe that separating the healthcare services business into a separate
public company will allow SHS to more closely tie compensation incentives for
SHS's employees to the performance of the healthcare services business and
allow SHS to implement closely tailored business strategies for its particular
marketing services. As a separate company, SHS is also expected to benefit from
improved access to capital markets and a management team who is able to focus
its attention solely on the healthcare services business.

After the distribution, we will no longer own any SHS common stock. However,
we will enter into certain agreements with SHS to define our ongoing
relationship after the distribution. These agreements also will allocate
responsibility between SHS and us for obligations arising prior to the
distribution and for certain obligations that might arise in the future.

The distribution is not conditioned upon approval of the recapitalization and
is expected to be completed before the implementation of the recapitalization
proposal. Information about the distribution is contained in an information
statement, which is attached to this accompanying proxy statement and
prospectus as Annex D.

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<PAGE>

SNYDER COMMUNICATIONS--MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

Overview

Since completing our initial public offering in September 1996, we have
significantly expanded the range of direct marketing, advertising and
communications services and Internet professional services we are able to offer
our clients. This expansion has been accomplished by building and initiating
new programs or service offerings and by acquiring businesses that offer
complementary services. Our strategy is to facilitate the growth of our
networks with improved sales and marketing resources and to integrate the sales
and marketing efforts of our acquired companies with those of our existing
operations. We strive to integrate our service capabilities within, as well as
across, our networks. We develop and deliver messages to both broad and
targeted audiences through a variety of communications channels. The service
offerings of acquired companies have been combined with those previously
offered by us to create SNC and circle.com. SNC consists of the BrannWorldwide,
Bounty SCA Worldwide and Arnold Communications networks. BrannWorldwide
provides full scale direct marketing and sales solutions. Bounty SCA Worldwide
provides sales promotion and specialty marketing services. Arnold
Communications operates SNC's advertising and public relations operations. The
SNC stock is intended to separately track the performances of SNC and a
retained interest in circle.com Circle.com provides Internet professional
services. Circle.com comprises 3% of our total revenues. The circle.com stock
is intended to separately track the performance of circle.com. Throughout 1998
and 1997, we completed acquisitions accounted for as both poolings of interests
and as purchases. During 1998 and 1997, we issued 8,604,293 and 10,414,888
shares, respectively, in pooling of interests transactions with companies in
the direct marketing, advertising and communications industry. Of the total
shares issued in pooling of interests transactions, 6,545,928 were to companies
that operate through BrannWorldwide, 8,983,714 were to companies that operate
through Bounty SCA Worldwide and 3,489,539 were to companies that operate
through Arnold Communications.

Results of Operations

In SNC, net revenues from direct marketing and advertising services may be
based on a specific unit of performance, a fixed project amount or an annual
retainer. In circle.com, net revenues from Internet professional services are
generally based on a fixed project amount or the time and materials utilized.

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

Selling, general and administrative expenses consist primarily of costs
associated with administrative functions, such as finance, accounting, human
resources and information technology, as well as personnel costs of senior
management not specifically associated with client services. Snyder
Communications' overhead and administrative shared services are allocated among
SNC and circle.com based upon estimated usage.

Compensation to stockholders consists of excess compensation paid to certain
stockholders of acquired companies prior to their respective mergers with
Snyder Communications. The amount by which the historical compensation of these
stockholders exceeds that provided in their employment contracts with Snyder
Communications has been classified as compensation to stockholders.

ESOP expense is the compensation expense recorded when shares are committed
to be released to ESOP participants. The amount of the expense is based on the
current market price of the shares and will vary based upon the amount of debt
repaid by the ESOP during the period.

Acquisition and related costs consist primarily of investment banking fees,
other professional service fees, certain tax payments and other contractual
payments resulting from the consummation of our pooling of interests
transactions, as well as the costs of consolidating certain of our acquired
operations.

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<PAGE>

The following sets forth, for the periods indicated, certain components of
our income statement data, including such data as a percentage of revenues. Pro
forma net income includes a provision for income taxes as if all of our
operations had been taxed as a C corporation for all periods presented. Pro
forma net income from continuing operations, excluding nonrecurring items
represents income from continuing operations adjusted to reflect a provision
for income taxes as if we had been taxed similarly to a C corporation for all
periods presented and the elimination of compensation to stockholders, ESOP
expense and acquisition and related costs. We consider compensation to
stockholders, ESOP expense and acquisition costs to be nonrecurring, because
our current operations will not result in any compensation to stockholders,
ESOP expense or acquisition costs in future periods.

<TABLE>
<CAPTION>
For the Three Months Ended For the Years Ended
March 31, December 31,
-------------------------------- --------------------------------------------------
1999 1998 1998 1997 1996
--------------- --------------- --------------- --------------- ---------------
(unaudited) (dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Revenues............ $138,081 100.0% $109,584 100.0% $493,803 100.0% $403,072 100.0% $349,223 100.0%
Operating expenses:
Cost of services........ 90,930 65.9 71,497 65.2 322,980 65.4 273,899 68.0 236,793 67.8
Selling, general and
administrative
expenses............... 24,168 17.5 23,975 21.9 96,362 19.5 93,371 23.2 77,705 22.3
Compensation to
stockholders........... -- -- 192 0.2 573 0.1 12,422 3.1 4,939 1.4
ESOP expense............ -- -- -- -- -- -- 5,411 1.3 6,553 1.9
Acquisition and related
costs.................. 709 0.5 22,597 20.6 38,941 7.9 31,389 7.8 -- --
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Income (loss) from
operations............. 22,274 16.1 (8,677) (7.9) 34,947 7.1 (13,420) (3.4) 23,233 6.6
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Interest expense........ (286) (0.2) (441) (0.4) (1,753) (0.4) (3,178) (0.8) (5,385) (1.5)
Investment income....... 670 0.5 898 0.8 3,638 0.7 2,944 0.7 2,371 0.7
Income tax provision.... 8,832 6.4 (3,644) (3.3) 15,472 3.1 2,982 0.7 4,738 1.4
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Income (loss) from
continuing operations.. 13,826 10.0 (4,576) (4.2) 21,360 4.3 (16,636) (4.2) 15,481 4.4
Loss from discontinued
operations............. 5,089 3.7 (4,052) (3.7) 1,446 0.3 (10,225) (2.5) (1,415) (0.4)
Extraordinary item, less
applicable income
taxes.................. -- -- -- -- -- -- -- -- (1,216) (0.3)
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Net income (loss)....... $ 18,915 13.7% $ (8,628) (7.9)% $ 22,806 4.6% $(26,861) (6.7)% $ 12,850 3.7%
======== ===== ======== ===== ======== ===== ======== ===== ======== =====
Pro Forma net income
(loss)................. $ 18,915 13.7% $(10,624) (9.7)% $ 20,145 4.1% $(30,792) (7.6)% $ 6,558 1.9%
======== ===== ======== ===== ======== ===== ======== ===== ======== =====
Pro Forma net income
(loss) from continuing
operations and
excluding nonrecurring
compensation to
stockholders, ESOP
expense and acquisition
and related costs...... $ 14,366 10.4% $ 9,277 8.5% $ 48,609 9.8% $ 21,412 5.3% $ 17,801 5.1%
======== ===== ======== ===== ======== ===== ======== ===== ======== =====
</TABLE>

Three Months Ended March 31, 1999, Compared to Three Months Ended March 31,
1998

Revenues. Our revenues increased $28.5 million, or 26.0%, to $138.1 million
in the first quarter of 1999 from $109.6 million in the first quarter of 1998.
This increase was due primarily to increased services for customers within the
BrannWorldwide network to whom we provide full-scale direct marketing and sales
solutions.

Cost of services. Our cost of services increased $19.4 million, or 27.1%, to
$90.9 million in the first quarter of 1999 from $71.5 million in the first
quarter of 1998. Cost of services as a percentage of revenues remained fairly
consistent at 65.9% in the first quarter of 1999 and 65.2% in the first quarter
of 1998. In the first quarter of 1999, cost of services as a percentage of
revenues was favorably impacted by a fee of $3.8 million, net of related
expenses, that was received for termination of certain services under an
existing contract.

Selling, General and Administrative Expenses. Our selling, general and
administrative expenses increased $0.2 million, or 0.8%, to $24.2 million in
the first quarter of 1999 from $24.0 million in the first quarter of 1998.
Selling, general and administrative expenses as a percentage of revenues
decreased to 17.5% in the first quarter of 1999 from 21.9% in the first quarter
of 1998. We have monitored and contained overhead costs closely in all of our
operations.

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<PAGE>

Compensation to Stockholders. No compensation to stockholders was recorded in
the three months ended March 31, 1999. Compensation to stockholders was $0.2
million in the three months ended March 31, 1998. Compensation to stockholders
reflects compensation paid to certain stockholders of acquired companies prior
to their respective mergers with us that is in excess of the compensation
provided for in their employment contracts with us. The amount by which the
historical compensation paid to these stockholders exceeds the amount provided
for in their respective employment contracts with us has been classified as
compensation to stockholders. No compensation to stockholders is recorded
subsequent to an acquisition by us.

Acquisition and Related Costs. We recorded $0.7 million in acquisition and
related costs during the three months ended March 31, 1999 related to the
consolidation and integration of certain of our acquired operations. We
recorded $22.6 million in acquisition and related costs during the three months
ended March 31, 1998, and these costs were related to the consummation of
pooling of interests transactions during the three months ended March 31, 1998.
We completed three pooling of interests transactions valued at approximately
$206 million during the three months ended March 31, 1998.

Interest Expense. We recorded $0.3 million of interest expense in the first
quarter of 1999 and $0.4 million of interest expense in the first quarter of
1998. The decrease in interest expense is due to the pay down of long-term
debt.

Investment Income. We recorded $0.7 million of investment income in the first
quarter of 1999 and $0.9 million of investment income in the first quarter of
1998. Investment income varies based on the amount of cash available to invest
during the period.

Income Tax Provision. We recorded a tax provision of $8.8 million in the
three months ended March 31, 1999. Our effective tax rate on our recurring
operations is approximately 38.0% for the three months ended March 31, 1999.
The actual tax provision recorded differs from the effective rate due to the
nondeductibility of certain of the nonrecurring costs recorded during the
period as well as the tax status of certain of the acquired companies prior to
their mergers with us.

Income (Loss) from Continuing Operations. Our income from continuing
operations increased $18.4 million to income of $13.8 million in the first
quarter of 1999 from a loss of $4.6 million in the first quarter of 1998, due
mainly to improved operating margins. Operating margins increased due to the
significant decrease in nonrecurring acquisition and related costs, as well as
the close monitoring and containment of overhead costs.

Discontinued Operations. In June 1999, our board of directors approved the
spin-off of our healthcare services group through a distribution to existing
stockholders. Therefore, the results of operations of our healthcare services
group have been classified as discontinued operations. Our healthcare services
group reported net income of $5.1 million in the first quarter of 1999 and a
net loss of $4.1 million in the first quarter of 1998. Net income from the
discontinued healthcare operations increased due to both the overall growth
within healthcare services and the decrease in nonrecurring acquisition and
related costs.

Net Income (Loss). Our net income increased $27.5 million to $18.9 million in
the first quarter of 1999 from a loss of $8.6 million in the first quarter of
1998 due primarily to our overall growth and the decrease in nonrecurring
acquisition and related costs.

Pro Forma Net Income (Loss). Pro forma net income (loss) includes a provision
for income taxes as if all of our operations were taxed as a C corporation. In
the first quarter of 1999, all of our operations were taxed as a C corporation,
so net income and pro forma net income are the same. The income tax provision
in the first quarter of 1998 includes a benefit from the S corporation status
of certain entities prior to our acquisition of them. Pro forma net income
increased $29.5 million to $18.9 million in the first quarter of 1999 from a
loss of $10.6 million in the first quarter of 1998. The increase in pro forma
net income is due primarily to our overall growth and the decrease in
nonrecurring acquisition and related costs. Pro forma net income from
continuing operations and excluding nonrecurring costs increased $5.1 million,
or 54.8%, to $14.4 million in the first quarter of 1999 from $9.3 million in
the first quarter of 1998. The increase in pro forma net income excluding
nonrecurring costs is due primarily to the growth in revenues and the reduction
in overhead costs as a percentage of revenues.

64
<PAGE>

Year Ended December 31, 1998, Compared to Year Ended December 31, 1997

Revenues. Our revenues increased $90.7 million, or 22.5%, to $493.8 million
in 1998 from $403.1 million in 1997. The increase in revenues was due primarily
to growth in the services provided to both existing and new customers during
1998. Services increased most to customers for which SNC provides full-scale
direct marketing and sales solutions.

Cost of Services. Our cost of services increased $49.1 million, or 17.9%, to
$323.0 million in 1998 from $273.9 million in 1997 due to our overall growth.
Cost of services as a percentage of revenues decreased to 65.4% in 1998 from
68.0% in 1997. The decrease in cost of services as a percentage of revenues is
due to the ability of existing client support personnel within the
BrannWorldwide network to support its growth as well as a change in the overall
mix of services provided within the Arnold Communications network.

Selling, General and Administrative Expenses. Our selling, general and
administrative expenses increased $3.0 million, or 3.2%, to $96.4 million in
1998 from $93.4 million in 1997. Selling, general and administrative expenses
as a percentage of revenues decreased to 19.5% in 1998 from 23.2% in 1997 due
primarily to the revenue growth from the significant increase in services
provided throughout 1998. We have monitored and contained overhead costs
closely in all of our operations.

Compensation to Stockholders. Compensation to stockholders was $0.6 million
in 1998 and $12.4 million in 1997. Compensation to stockholders reflects
compensation paid to certain stockholders of acquired companies prior to their
respective mergers with us that is in excess of the compensation provided for
in their employment contracts with us. The amount by which the historical
compensation paid to these stockholders exceeds the amount provided for in
their respective employment contracts with us has been classified as
compensation to stockholders. No compensation to stockholders is recorded
subsequent to an acquisition by us. The $0.6 million recorded in 1998 relates
to certain companies acquired in the third and fourth quarters of 1998, and
therefore, was incurred during 1998 by the acquired companies prior to our
acquisition of them.

ESOP Expenses. We did not incur any ESOP expense in 1998. All obligations of
the ESOP were settled in 1997, and $5.4 million of ESOP expense was incurred in
1997. The employees of one of the acquired companies that previously
participated in the ESOP now participate in our stock incentive plan. We do not
expect to incur any ESOP expense in future periods.

Acquisition and Related Costs. We recorded $38.9 million in nonrecurring
acquisition and related costs during 1998. These costs were primarily related
to the consummation of acquisitions in 1998 and consisted of investment banking
fees, expenses associated with the accelerated vesting of options held by
employees of certain acquired companies, other professional service fees,
transfer taxes and other contractual payments. In addition, this amount
included a charge of approximately $2.3 million for costs necessary to
consolidate and integrate some of our operations within the Bounty SCA
Worldwide network. We expect these integration activities to be substantially
complete by the third quarter of 1999. The charge consisted of $1.2 million of
severance and other costs associated with the termination of 42 operations
personnel, and $1.1 million of fees and other costs related to these
integration activities. The integration is not expected to result in a
headcount reduction. Most of the terminated employees elected not to relocate
and will be replaced.

We recorded $31.4 million in nonrecurring acquisition and related costs
during 1997 related to the consummation of our 1997 acquisitions. These costs
are discussed further under the caption "Year Ended December 31, 1997, Compared
to Year Ended December 31, 1996."

Interest Expense. We recorded $1.8 million of interest expense in 1998 and
$3.2 million of interest expense in 1997. We do not have any significant debt
obligations outstanding. The interest expense recorded in both 1998 and 1997
consists primarily of interest on debt at acquired companies prior to their
acquisition by us. We generally repaid the debt of acquired companies.

Investment Income. We recorded $3.6 million of investment income in 1998 and
$2.9 million of investment income in 1997. The increase in investment income
corresponds to the increase in funds available for investment. Snyder
Communications' average cash balance was greater in 1998 than in 1997 due
primarily to public stock offerings and stock option exercises.

65
<PAGE>

Income Tax Provision. We recorded a $15.5 million tax provision in 1998,
consisting of a $27.7 million provision for our income from recurring
operations plus interest, a $9.6 million benefit from the $39.5 million in
nonrecurring costs and a $2.6 million benefit from the S corporation status of
certain entities prior to our acquisition of them. Our effective rate for the
year ended December 31, 1998 differs from the Federal statutory rate due
primarily to the nondeductibility of certain of the nonrecurring costs and
state income taxes. Pro forma income discussed below includes a provision for
income taxes as if all of our operations had been taxed as a C corporation for
the year ended December 31, 1998.

We recorded a $3.0 million tax provision in 1997, consisting of a $14.2
million provision for our income from recurring operations less interest, an
$8.6 million benefit from the $49.2 million in nonrecurring costs and a $2.6
million benefit from the S corporation status of certain entities prior to our
acquisition of them. Pro forma income discussed below includes a provision for
income taxes as if all of our operations had been taxed as a C corporation for
the year ended December 31, 1997.

Income (Loss) from Continuing Operations. Our income from continuing
operations increased $38.0 million to income of $21.4 million in 1998 from a
loss of $16.6 million in 1997, due primarily to the overall growth in revenues
and the containment of costs.

Discontinued Operations. In June 1999, our board of directors approved the
spin-off of our healthcare services group through a distribution to existing
stockholders. Therefore, the results of operations of our healthcare services
group have been classified as discontinued operations. Our healthcare services
group reported net income of $1.4 million in 1998 and a net loss of $8.7
million in 1997. The increase in income (loss) from discontinued operations
reflects the overall growth of the healthcare services group. Growth in
revenues exceeded growth in total costs and expenses.

In October 1997, the board of directors of one of the companies acquired in a
pooling of interests transaction in 1998 approved the spin-off of its sports
management operations which were carried on by one of its wholly owned
subsidiaries, Bob Woolf Associates, Inc. ("BWA"). The acquiree purchased BWA in
May 1996. The spin-off was completed on October 31, 1997 through a distribution
of shares to the common stockholders of the acquiree. BWA reported a net loss
of $1.5 million in 1997.

Net Income (Loss). Our net income increased $49.7 million to $22.8 million in
1998 from a loss of $26.9 million in 1997 which is consistent with our growth
in revenues and containment of costs.

Pro Forma Income (Loss). Our pro forma income (loss) increased $50.9 million
to income of $20.1 million in 1998 from a loss of $30.8 million in 1997, due
primarily to the overall growth in revenues and containment of costs. Revenue
growth exceeded the growth in cost of services and selling, general and
administrative expenses. Pro forma net income from continuing operations
adjusted to exclude nonrecurring costs, consisting of compensation to
stockholders and acquisition and related costs increased $27.2 million, or
127%, to $48.6 million in 1998 from $21.4 million in 1997.

Year Ended December 31, 1997, Compared to Year Ended December 31, 1996

Revenues. Our revenues increased $53.9 million, or 15.4%, to $403.1 million
in 1997 from $349.2 million in 1996. The increase in revenues was due primarily
to growth in the services provided to both existing and new customers during
1997. Services increased most to customers for which SNC provides product
sampling and advertising services.

Cost of Services. Our cost of services increased $37.1 million, or 15.7%, to
$273.9 million in 1997 from $236.8 million in 1996. Cost of services as a
percentage of revenues remained consistent at 68.0% in 1997 and 67.8% in 1996.
The increase in cost of services is consistent with the increase in services
provided.

Selling, General and Administrative Expenses. Our selling, general and
administrative expenses increased $15.7 million, or 20.2%, to $93.4 million in
1997 from $77.7 million in 1996. Selling, general and administrative expenses
as a percentage of revenues remained fairly consistent at 23.2% in 1997 and
22.3% in 1996. The increase in selling, general and administrative expenses is
consistent with our overall growth.

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<PAGE>

Compensation to Stockholders. Compensation to stockholders was $12.4 million
in 1997 and $4.9 million in 1996. Compensation to stockholders reflects
compensation paid to certain stockholders of acquired companies prior to their
respective mergers with us that is in excess of the compensation provided for
in their employment contracts with us. The amount by which the historical
compensation paid to these stockholders exceeds the amount provided for in
their respective employment contracts with us has been classified as
compensation to stockholders. No compensation to stockholders is recorded
subsequent to an acquisition by us. The composition of the amounts recorded in
1997 varies from the amount recorded in 1996 because the amounts recorded were
based on specific criteria and agreements at certain acquired companies that
existed in 1997 and in 1996 prior to the their respective mergers with us.

ESOP Expenses. ESOP expense decreased $1.2 million, or 18.2%, to $5.4 million
in 1997 from $6.6 million in 1996. ESOP expense represents the fair value of
shares released to ESOP participants during the period. During 1997, all
outstanding debt of the ESOP was repaid, and we do not expect to record ESOP
expense in future periods.

Acquisition and Related Costs. We recorded $31.4 million in nonrecurring
acquisition and related costs during 1997. Of the $31.4 million, $17.0 million
were costs directly related to the consummation of acquisitions in 1997. These
costs included primarily investment banking fees, other professional service
fees, certain U.K. excise and transfer taxes, as well as a non-cash charge of
approximately $9.1 million related to the accelerated vesting of the options
held by employees of one of the acquired companies. The remaining $5.3 million
consisted of the write-off of deferred license fees and the accrual of a
liability expected to resolve outstanding litigation. Both the write-off of the
deferred fees and the accrual of the liability were recorded due to changes in
fact which resulted from acquisitions in 1997.

Interest Expense. We recorded $3.2 million of interest expense in 1997 and
$5.4 million of interest expense in 1996. We do not have any significant debt
obligations outstanding. The interest expense recorded in both 1997 and 1996
consists primarily of interest on debt at acquired companies prior to their
acquisition by us. We generally repaid the debt of acquired companies.

Investment Income. We recorded $2.9 million of investment income in 1997 and
$2.4 million of investment income in 1996. The amount recorded in investment
income is directly related to the amount of funds available for investment.

Income Tax Provision. We recorded a $3.0 million tax provision in 1997,
consisting of a $14.2 million provision for our income from recurring
operations less interest, an $8.6 million benefit from the $49.2 million in
nonrecurring costs, and a $2.6 million benefit from the S corporation status of
certain entities prior to our acquisitions of them. Our effective tax rate for
the year ended December 31, 1997 differs from the federal statutory rate due
primarily to the nondeductibility of certain of the nonrecurring costs and
state income taxes. Pro forma net income discussed below includes a provision
for income taxes as if all our operations had been taxed as a C corporation for
the year ended December 31, 1997.

The income tax provision of $4.7 million in 1996 reflects the actual income
tax provisions of the previously separate companies before their respective
acquisitions by us. Not all of the entities acquired were subject to income
taxes prior to their respective acquisitions by us. Also, for the period from
January 1, 1996 until our reorganization of September 24, 1996, we had elected
to be treated for federal and certain state income tax purposes as an S
corporation, and therefore, our stockholders were taxed on their proportionate
share of our taxable income, and we did not have an obligation to pay income
taxes. Pro forma net income discussed below includes a provision for income
taxes, as if all of our operations had been taxable as a C corporation in 1996.

Discontinued Operations. The loss from discontinued operations in 1997
consisted of a loss of $8.7 million from the healthcare services group and a
loss of $1.5 million from BWA. The loss from discontinued operations in 1996
consisted of $0.1 million in income from the healthcare services group offset
by a $1.5 million loss from BWA. The 1997 loss within the healthcare services
group was due primarily to the nonrecurring acquisition and related costs and
the recapitalization costs recorded in 1997.

67
<PAGE>

Extraordinary Item. In October 1996, we redeemed in full the subordinated
debentures and recorded an extraordinary loss of $1.2 million, net of income
taxes. The extraordinary loss consists of prepayment penalties and the write-
off of unamortized discount and debt issuance costs.

Net Income (Loss). Our net income decreased $39.7 million to a loss of $26.9
million in 1997 from income of $12.8 million in 1996. The net loss recorded in
1997 is due primarily to our nonrecurring acquisition and related costs and
compensation to stockholders offset by our overall growth.

Pro Forma Income (Loss). Our pro forma net income decreased $37.4 million to
a net loss of $30.8 million in 1997 from net income of $6.6 million in 1996.
The nonrecurring costs recorded in 1997, slightly offset by our growth,
resulted in the overall pro forma net loss. Pro forma income from continuing
operations adjusted to exclude nonrecurring costs and compensation to
stockholders, ESOP expense and acquisition and related costs increased $3.6
million to $21.4 million in 1997 from $17.8 million in 1996. The increase in
pro forma income from continuing operations adjusted to exclude nonrecurring
costs is consistent with our overall growth.

Liquidity and Capital Resources

At March 31, 1999, we had $56.4 million in cash and equivalents. Cash and
equivalents increased $8.5 million during the three months ended March 31,
1999, due to the $7.9 million provided by operating activities and the $10.5
million provided by financing activities, offset by the $0.3 million effect of
changes in the exchange rate, the $3.9 million used in investing activities and
the $5.8 million used by discontinued operations. The $10.5 million in cash
provided by financing activities consists primarily of the proceeds received
from the exercise of stock options. The $3.9 million in cash used in investing
activities consists primarily of capital expenditures offset by net cash
received from a purchase transaction. The $5.8 million in cash used by
discontinued operations is primarily driven by $5.6 million used in operating
activities at the healthcare services group, which we intend to spin-off to our
stockholders.

We believe that our cash and equivalents, as well as the cash provided by
operations, and available financing will be sufficient to fund our current
operations, planned capital expenditures and anticipated growth.

We are undergoing an assessment of our current systems and equipment and are
in the process of making the modifications necessary to address the issues
presented by the year 2000. We have identified certain systems that are not yet
compliant with the year 2000. Modifications have already begun on all of these
systems. We expect to incur no more than $3.0 million in capital expenditures
on system upgrades which are designed in part to address specific year 2000
requirements. Approximately $2.4 million was incurred through March 31, 1999.
We began testing our systems for compliance with the year 2000 in 1997 and
expect testing to be completed on our current systems by the middle of 1999.
Although we believe that we will achieve year 2000 compliance for our systems
prior to January 1, 2000 without incurring significant additional costs, there
can be no assurance that such compliance will be achieved or that it will be
achieved without additional significant costs. If year 2000 compliance cannot
be confirmed subsequent to making the necessary modifications, we intend to
seek other compliant systems for ourselves or to develop other contingency
arrangements.

We are subject to the impact of foreign currency fluctuations, specifically
that of the British pound. To date, changes in the British pound exchange rate
have not had a material impact on our liquidity or results of operations. We
continually evaluate our exposure to exchange rate risk but do not currently
hedge such risk.

Given the extent of our services currently provided in continental Europe and
the nature of those services, we do not expect the introduction of the Euro to
have a material impact on our operations or cash flows. We will continue to
evaluate the impact of the introduction of the Euro as we continue to expand
the services offered and the European locations in which we operate.

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<PAGE>

Effect of Inflation

Because of the relatively low level of inflation experienced in the United
States and Europe, inflation did not have a material impact on our consolidated
results of operations for 1998, 1997 or 1996.

Quantitative and Qualitative Disclosures About Market Risk

At December 31, 1998, we had approximately $12.3 million of long-term debt.
Based upon the relative insignificance of long-term debt to our financial
position, we do not believe that we have significant exposure to the volatility
of interest rates. Approximately 32% of our revenues are earned outside of the
United States, with the majority earned in the United Kingdom. All foreign
operations incur both income and expenses in their local currency, and
accordingly, we do not believe we have significant economic exposure to
fluctuations in foreign exchange rates. Because we are required to report our
foreign operations as if they had been incurred in U.S. dollars, fluctuations
in foreign exchange rates could have a detrimental impact on the reported
financial results under generally accepted accounting principles. We do not
currently engage in hedging or other market risk management tools.

69
<PAGE>

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

Overview

SNC develops and delivers marketing messages to both broad and targeted
audiences through a variety of communication channels. SNC consists of the
BrannWorldwide, Bounty SCA Worldwide and Arnold Communications networks.
BrannWorldwide provides a broad range of services and full scale direct
marketing and sales solutions. Bounty SCA Worldwide distributes products and
information to targeted customers at a time when they are generally most
interested in trying new products. Arnold Communications operates SNC's
advertising and public relations operations. Throughout 1998 and 1997, SNC
completed acquisitions accounted for as both poolings of interests and as
purchases. During 1998 and 1997, SNC issued 8,604,293 and 10,414,888 shares,
respectively, in pooling of interests transactions with companies in the direct
marketing, advertising and communications industry. Of the total shares issued
in pooling of interests transactions, 6,545,928 shares were to companies that
operate through BrannWorldwide, 8,983,714 shares were to companies that operate
through Bounty SCA Worldwide and 3,489,539 shares were to companies that
operate through Arnold Communications. SNC believes the synergies created by
its acquisitions have increased its opportunities and strengthened its client
relationships.

Results of Operations

In SNC, net revenues from direct marketing and advertising services may be
based on a specific unit of performance, a fixed project amount or an annual
retainer.

Selling, general and administrative expenses consist primarily of costs
associated with administrative functions, such as finance, accounting, human
resources, and information technology, as well as personnel costs of senior
management not specifically associated with client services. A portion of
Snyder Communications' overhead and administrative shared services are
allocated to SNC based upon estimated usage.

Compensation to stockholders consists of excess compensation paid to certain
stockholders of acquired companies prior to their respective mergers with SNC.
The amount by which the historical compensation of these stockholders exceeds
that provided in their employment contracts with SNC has been classified as
compensation to stockholders.

Acquisition and related costs consist primarily of investment banking fees,
other professional service fees, certain tax payments and other contractual
payments resulting from the consummation of SNC's pooling of interests
transactions, as well as the costs of consolidating certain of SNC's acquired
operations.

The following sets forth, for the periods indicated, certain components of
SNC's income statement data, including such data as a percentage of revenues.
Pro forma net income includes a provision for income taxes as if all operations
of SNC had been taxed as a C corporation for all periods presented. Pro forma
net income from continuing operations, excluding nonrecurring items represents
income from continuing operations adjusted to reflect a provision for income
taxes as if SNC had been taxed similarly to a C corporation for all periods
presented and the elimination of compensation to stockholders, ESOP expense and
acquisition and

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<PAGE>

related costs. SNC considers compensation to stockholders, ESOP expense and
acquisition costs to be nonrecurring, because SNC's current operations will not
result in any compensation to stockholders, ESOP expense or acquisition costs
in future periods.

<TABLE>
<CAPTION>
For the Three Months Ended For the Years Ended
March 31, December 31,
-------------------------------- --------------------------------------------------
1999 1998 1998 1997 1996
--------------- --------------- --------------- --------------- ---------------
(unaudited) (dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Revenues............ $132,955 100.0% $107,841 100.0% $480,289 100.0% $397,505 100.0% $345,915 100.0%
Operating expenses:
Cost of services........ 87,122 65.6 70,174 65.1 314,255 65.4 270,268 68.0 234,526 67.8
Selling, general and
administrative
expenses............... 21,665 16.3 23,227 21.5 92,071 19.2 90,555 22.8 75,950 22.0
Compensation to
stockholders........... -- -- 192 0.2 573 0.1 12,422 3.1 4,939 1.4
ESOP expense............ -- -- -- -- -- -- 5,193 1.3 6,439 1.8
Acquisition and related
costs.................. 709 0.5 22,597 20.9 38,941 8.1 31,389 7.9 -- --
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Income (loss) from
operations............. 23,459 17.6 (8,349) (7.7) 34,449 7.2 (12,322) (3.1) 24,061 7.0
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Interest expense........ (286) (0.2) (441) (0.4) (1,753) (0.4) (3,178) (0.8) (5,385) (1.6)
Investment income....... 670 0.5 898 0.8 3,638 0.8 2,944 0.8 2,371 0.7
Income (loss) related to
retained interest in
circle.com............. (174) (0.1) (66) (0.1) -- -- (26) -- (48) --
Income tax provision
(benefit).............. 9,080 6.8 (3,672) (3.4) 14,972 3.1 3,940 1.0 5,308 1.5
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Income (loss) from
continuing operations.. 14,589 11.0 (4,286) (4.0) 21,362 4.5 (16,522) (4.1) 15,691 4.6
Income (loss) from
discontinued
operations............. 5,089 3.8 (4,052) (3.7) 1,446 0.3 (10,225) (2.6) (1,415) (0.4)
Extraordinary item, less
applicable income
taxes.................. -- -- -- -- -- -- -- -- (1,216) (0.4)%
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Net income (loss)....... $ 19,678 14.8% $ (8,338) (7.7)% $ 22,808 4.8% $(26,747) (6.7)% $ 13,060 3.8%
======== ===== ======== ===== ======== ===== ======== ===== ======== =====
Pro Forma adjusted net
income (loss).......... $ 19,678 14.8% $(10,459) 9.7% $ 20,022 4.2% $(30,067) (7.6)% $ 7,075 2.0%
======== ===== ======== ===== ======== ===== ======== ===== ======== =====
Pro Forma adjusted net
income (loss) from
continuing operations
and excluding
nonrecurring
compensation
to stockholders, ESOP
expense and acquisition
and related costs...... $ 15,129 11.4% $ 9,444 8.8% $ 48,489 10.1% $ 21,966 5.5% $ 18,247 5.3%
======== ===== ======== ===== ======== ===== ======== ===== ======== =====
</TABLE>

Three Months Ended March 31, 1999, Compared to Three Months Ended March 31,
1998

Revenues. SNC's revenues increased $25.1 million, or 23.3%, to $132.9 million
in the first quarter of 1999 from $107.8 million in the first quarter of 1998.
The increase in revenues from the quarter ended March 31, 1999 was due
primarily to increased sales volumes within the BrannWorldwide network. SNC
experienced growth in the services provided primarily to existing customers
during the three months ended March 31, 1999. Services increased most to
customers for which SNC provides full-scale direct marketing and sales
solutions.

Cost of services. SNC's cost of services increased $16.9 million, or 24.1%,
to $87.1 million in the first quarter of 1999 from $70.2 million in the first
quarter of 1998. Cost of services as a percentage of revenues remained
consistent at 65.6% in the first quarter of 1999 and 65.1% in the first quarter
of 1998. In the first quarter of 1999, cost of services as a percentage of
revenues was favorably impacted by a fee of $3.8 million, net of related
expenses, that was received for termination of certain services under an
existing contract.

Selling, General and Administrative Expenses. SNC's selling, general and
administrative expenses decreased $1.5 million, or 6.5%, to $21.7 million in
the first quarter of 1999 from $23.2 million in the first quarter of 1998.
Selling, general and administrative expenses as a percentage of revenues
decreased to 16.3% in the first quarter of 1999 from 21.5% in the first quarter
of 1998 due to the close monitoring and containment of overhead costs at SNC.

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<PAGE>

Compensation to Stockholders. No compensation to stockholders was recorded in
the three months ended March 31, 1999. Compensation to stockholders was $0.2
million in the three months ended March 31, 1998. Compensation to stockholders
reflects compensation paid to certain stockholders of acquired companies prior
to their respective mergers with SNC that is in excess of the compensation
provided for in their employment contracts with SNC. The amount by which the
historical compensation paid to these stockholders exceeds the amount provided
for in their respective employment contracts with SNC has been classified as
compensation to stockholders. No compensation to stockholders is recorded
subsequent to an acquisition by SNC.

Acquisition and Related Costs. SNC recorded $0.7 million in acquisition and
related costs during the three months ended March 31, 1999 related to the
consolidation and integration of certain of SNC's acquired operations. SNC
recorded $22.6 million in acquisition and related costs during the three months
ended March 31, 1998, and these costs were related to the consummation of
pooling of interests transactions during the three months ended March 31, 1998.
SNC completed three pooling of interests transactions valued at approximately
$206 million during the three months ended March 31, 1998.

Interest Expense. SNC recorded $0.3 million of interest expense in the three
months ended March 31, 1999 and $0.4 million of interest expense in the three
months ended March 31, 1998. The decrease in interest expense is due to the pay
down of long-term debt.

Investment Income. SNC recorded $0.7 million of investment income in the
three months ended March 31, 1999 and $0.9 million of investment income in the
three months ended March 31, 1998. Investment income varies based on the amount
of cash available to invest during the period.

Income (loss) Related to Retained Interest in circle.com. SNC recorded a $0.2
million loss related to its retained interest in circle.com for the three
months ended March 31, 1999 and a loss of $0.1 million for the three months
ended March 31, 1998. SNC's loss related to its retained interest in circle.com
represents 20% of the net loss of circle.com.

Income Tax Provision. SNC recorded a tax provision of $9.1 million in the
three months ended March 31, 1999. SNC's effective tax rate on its recurring
operations is approximately 38.0% for the three months ended March 31, 1999.
The actual tax provision recorded differs from the effective rate due to the
nondeductibility of certain of the nonrecurring costs recorded during the
period as well as the tax status of certain of the acquired companies prior to
their mergers with SNC.

Income (Loss) from Continuing Operations. SNC's income from continuing
operations increased $18.9 million to income of $14.6 million in the first
quarter of 1999 from a loss of $4.3 million in the first quarter of 1998, due
mainly to improved operating margins. Operating margins increased due to the
significant decrease in nonrecurring acquisition and related costs, as well as
the close monitoring and containment of overhead costs.

Discontinued Operations. In June 1999, Snyder Communications' board of
directors approved the spin-off of Snyder Communications' healthcare services
business through a distribution to existing Snyder Communications stockholders.
Therefore, the results of operations of the healthcare services business have
been classified as discontinued operations. The healthcare services business
reported net income of $5.1 million in the first quarter of 1999 and a net loss
of $4.1 million in the first quarter of 1998. Net income from the discontinued
healthcare operations increased due to both the overall growth within
healthcare services and the decrease in nonrecurring acquisition and related
costs.

Net Income (Loss). SNC's net income increased $28.0 million to $19.7 million
in the first quarter of 1999 from a loss of $8.3 million in the first quarter
of 1998 due primarily to SNC's overall growth and the decrease in nonrecurring
acquisition and related costs.

Pro Forma Net Income (Loss). Pro forma net income (loss) increased $30.2
million, to income of $19.7 million in the first quarter of 1999 from a loss of
$10.5 million in the first quarter of 1998, due primarily to SNC's overall
growth and the decrease in nonrecurring acquisition and related costs. Pro
forma net income from continuing operations excluding nonrecurring costs
increased $5.7 million, or 60.6%, to $15.1 million in

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the first quarter of 1999 from $9.4 million in the first quarter of 1998. The
increase in pro forma net income excluding nonrecurring costs is due primarily
to the growth in revenues and the reduced overhead costs, offset by the
decreasing gross margins.

Year Ended December 31, 1998, Compared to Year Ended December 31, 1997

Revenues. SNC's revenues increased $82.8 million, or 20.8%, to $480.3 million
in 1998 from $397.5 million in 1997. This increase in revenues was due
primarily to growth in the services provided to both existing and new customers
during 1998. Services increased most to customers for which SNC provides full-
scale direct marketing and sales solutions.

Cost of Services. SNC's cost of services increased $44.0 million, or 16.3%,
to $314.3 million in 1998 from $270.3 million in 1997. Cost of services as a
percentage of revenues decreased to 65.4% in 1998 from 68.0% in 1997. The
decrease in cost of services as a percentage of revenues is due to the ability
of existing client support personnel within the BrannWorldwide network to
support its growth as well as a change in the overall mix of services provided
within the Arnold Communications network.

Selling, General and Administrative Expenses. SNC's selling, general and
administrative expenses increased $1.5 million, or 1.7%, to $92.1 million from
$90.6 million in 1997. Selling, general and administrative expenses as a
percentage of revenues decreased to 19.2% in 1998 from 22.8% in 1997. SNC has
closely monitored and contained overhead costs within each of the networks.

Compensation to Stockholders. Compensation to stockholders was $0.6 million
in 1998 and $12.4 million in 1997. Compensation to stockholders reflects
compensation paid to certain stockholders of acquired companies prior to their
respective mergers with SNC that is in excess of the compensation provided for
in their employment contracts with SNC. The amount by which the historical
compensation paid to these stockholders exceeds the amount provided for in
their respective employment contracts with SNC has been classified as
compensation to stockholders. No compensation to stockholders is recorded
subsequent to an acquisition by SNC. The $0.6 million recorded in 1998 relates
to certain companies acquired in the third and fourth quarters of 1998, and
therefore, was incurred during 1998 by the acquired companies prior to their
acquisition.

ESOP Expenses. SNC did not incur any ESOP expense in 1998. All obligations of
the ESOP were settled in 1997, and $5.2 million of ESOP expense was incurred in
1997. The employees of one of the acquired companies that previously
participated in the ESOP now participate in Snyder Communications' stock
incentive plan. SNC does not expect to incur any ESOP expense in future
periods.

Acquisition and Related Costs. SNC recorded $38.9 million in nonrecurring
acquisition and related costs during 1998. These costs were primarily related
to the consummation of acquisitions in 1998 and consisted of investment banking
fees, expenses associated with the accelerated vesting of options held by
employees of certain acquired companies, other professional service fees,
transfer taxes and other contractual payments. In addition, this amount
included a charge of approximately $2.6 million for costs necessary to
consolidate and integrate some of SNC's operations within the Bounty SCA
Worldwide network. SNC expects these integration activities to be substantially
complete by the third quarter of 1999. The charge consisted of $1.6 million of
severance and other costs associated with the termination of 42 employees, and
$1.0 million of fees and other costs related to these integration activities.
The integration is not expected to result in a headcount reduction. Most of the
terminated employees elected not to relocate and will be replaced.

SNC recorded $31.4 million in nonrecurring acquisition and related costs
during 1997 related to the consummation of its 1997 acquisitions. These costs
are discussed further under the caption "Year Ended December 31, 1997, Compared
to Year Ended December 31, 1996."

Interest Expense. SNC recorded $1.8 million of interest expense in 1998 and
$3.2 million of interest expense in 1997. SNC does not have any significant
debt obligations outstanding. The interest expense recorded in both 1998 and
1997 consists primarily of interest on debt at acquired companies prior to
their acquisition by SNC. SNC generally repaid the debt of acquired companies.

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Investment Income. SNC recorded $3.6 million of investment income in 1998
and $2.9 million of investment income in 1997. The increase in investment
income corresponds to the increase in funds available for investment. SNC's
average cash balance was greater in 1998 than in 1997 due primarily to public
stock offerings and stock option exercises.

Income (loss) Related to Retained Interest in circle.com. SNC recorded no
income or loss related to its retained interest in circle.com in 1998 as
circle.com operated at a break-even level in 1998. SNC recorded a $0.1 million
loss related to its retained interest in circle.com in 1997. SNC's income
(loss) related to its retained interest in circle.com represents 20% of the
net income (loss) of circle.com.

Income Tax Provision. SNC recorded a $15.0 million tax provision in 1998,
consisting of a $27.2 million provision for our income from recurring
operations less interest, a $9.6 million benefit from the $39.5 million in
nonrecurring costs, and a $2.6 million benefit from the S corporation status
of certain entities prior to their respective acquisitions by SNC. SNC's
effective tax rate for the year ended December 31, 1998 differs from the
Federal statutory rate due primarily to the nondeductibility of certain of the
nonrecurring costs and state income taxes. Pro forma net income discussed
below includes a provision for income taxes as if all operations of SNC had
been taxed as a C corporation for the year ended December 31, 1998. SNC
recorded a $3.9 million tax provision in 1997. This provision is discussed
further under the caption "Year Ended December 31, 1997, Compared to Year
Ended December 31, 1996."

Income (Loss) from Continuing Operations. SNC's income from continuing
operations increased $37.9 million to income of $21.4 million in 1998 from a
loss of $16.5 million in 1997, due primarily to the overall growth in revenues
and the containment of costs.

Discontinued Operations. In June 1999, Snyder Communications' board of
directors approved the spin-off of Snyder Communications' healthcare services
business through a distribution to existing Snyder Communications'
stockholders. Therefore, the results of operations of the healthcare services
business have been classified as discontinued operations. The healthcare
services business reported net income of $1.4 million in 1998 and a net loss
of $8.7 million in 1997. The increase in income (loss) from discontinued
operations reflects the overall growth of the healthcare services business.
Growth in revenues exceeded growth in total costs and expenses.

In October 1997, the board of directors of one of the companies SNC acquired
in a pooling of interests transaction in 1998 approved the spin-off of its
sports management operations which were carried on by one of its wholly owned
subsidiaries, Bob Woolf Associates, Inc. ("BWA"). The acquiree purchased BWA
in May 1996. The spin-off was completed on October 31, 1997 through a
distribution of shares to the common stockholders of the acquiree. BWA
reported a net loss of $1.5 million in 1997.

Net Income (Loss). SNC's net income increased $49.5 million to $22.8 million
in 1998 from a loss of $26.7 million in 1997 which is consistent with SNC's
growth in revenues and containment of costs.

Pro Forma Net Income (Loss). Pro forma net income (loss) increased $50.1
million to net income of $20.0 million in 1998 from a net loss of $30.1
million in 1997, due primarily to the overall growth in revenues and
containment of costs and the decrease in nonrecurring costs. Pro forma net
income adjusted to exclude nonrecurring costs, consisting of compensation to
stockholders, recapitalization costs and acquisition and related costs, as
well as the extraordinary item and discontinued operations increased $26.5
million, or 120.5%, to $48.5 million in 1998 from $22.0 million in 1997. The
increase is due to increased revenues and increases in both gross and
operating margins during 1998.

Year Ended December 31, 1997, Compared to Year Ended December 31, 1996

Revenues. SNC's revenues increased $51.6 million, or 14.9%, to $397.5
million in 1997 from $345.9 million in 1996. This increase in revenues was due
primarily to growth in the services provided to both existing and new
customers during 1997. Services increased most to customers for which SNC
provides product sampling and advertising services.

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Cost of Services. SNC's cost of services increased $35.8 million, or 15.3%,
to $270.3 million in 1997 from $234.5 million in 1996. Cost of services as a
percentage of revenues remained consistent at 68.0% in 1997 and 67.8% in 1996.
The increase in cost of services in consistent with the increase in services
provided.

Selling, General and Administrative Expenses. SNC's selling, general and
administrative expenses increased $14.6 million, or 19.2%, to $90.6 million in
1997 from $76.0 million in 1996. Selling, general and administrative expenses
as a percentage of revenues remained fairly consistent at 22.8% in 1997 and
22.0% in 1996. The increase in selling, general and administrative expenses is
consistent with our overall growth.

Compensation to Stockholders. Compensation to stockholders was $12.4 million
in 1997 and $4.9 million in 1996. Compensation to stockholders reflects
compensation paid to certain stockholders of acquired companies prior to their
respective mergers with SNC that is in excess of the compensation provided for
in their employment contracts with SNC. The amount by which the historical
compensation paid to these stockholders exceeds the amount provided for in
their respective employment contracts with SNC has been classified as
compensation to stockholders. No compensation to stockholders is recorded
subsequent to an acquisition by SNC. The composition of the amounts recorded in
1997 varies from the amount recorded in 1996 because the amounts recorded were
based on specific criteria and agreements at certain acquired companies that
existed in 1997 and in 1996 prior to their respective mergers with SNC.

ESOP Expenses. ESOP expense decreased $1.2 million, or 18.8%, to $5.2 million
in 1997 from $6.4 million in 1996. ESOP expense represents the fair value of
shares released to ESOP participants during the period. During 1997, all
outstanding debt of the ESOP was repaid, and SNC does not expect to record ESOP
expense in future periods.

Acquisition and Related Costs. SNC recorded $31.4 million in nonrecurring
acquisition and related costs during 1997. Of the $31.4 million, $17.0 million
were costs directly related to the consummation of SNC's acquisitions in 1997.
These costs included primarily investment banking fees, other professional
service fees, certain U.K. excise and transfer taxes, as well as a non-cash
charge of approximately $9.1 million related to the accelerated vesting of the
options held by employees of one of the acquired companies. The remaining
$5.3 million consists of the write-off of deferred license fees and the accrual
of a liability expected to resolve outstanding litigation. Both the write-off
of the deferred fees and the accrual of the liability were recorded due to
changes in fact which resulted from SNC's acquisitions in 1997.

Interest Expense. SNC recorded $3.2 million of interest expense in 1997 and
$5.4 million of interest expense in 1996. SNC does not have any significant
debt obligations outstanding. The interest expense recorded in both 1997 and
1996 consists primarily of interest on debt at acquired companies prior to
their acquisition by SNC. SNC generally repaid the debt of acquired companies.

Investment Income. SNC recorded $2.9 million of investment income in 1997 and
$2.4 million of investment income in 1996. The amount recorded in investment
income is directly related to the amount of funds available for investment.

Income (loss) Related to Retained Interest in circle.com. SNC recorded a
$26,000 and $48,000 loss related to its retained interest in circle.com in 1997
and 1996, respectively. SNC's loss related to its retained interest in
circle.com represents 20% of the net loss of circle.com.

Income (Loss) from Continuing Operations. SNC's income from continuing
operations decreased $32.2 million to a loss of $16.5 million in 1997 from
income of $15.7 million in 1996, due primarily to the nonrecurring acquisition
and related costs recorded in 1997.

Income Tax Provision. SNC recorded a $3.9 million tax provision in 1997,
consisting of a $14.4 million provision for our income from recurring
operations less interest, an $8.5 million benefit from the $49.0 million in
nonrecurring costs, and a $2.0 million benefit from the S corporation status of
certain entities prior to their respective acquisitions by SNC. SNC's effective
tax rate for the year ended December 31, 1997 differs from the Federal
statutory rate due primarily to the nondeductibility of certain of the
nonrecurring costs and state income taxes. Pro forma net income discussed below
includes a provision for income taxes as if all operations of SNC had been
taxed as a C corporation for the year ended December 31, 1997.

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The income tax provisions of $5.3 million in 1996 reflects the actual income
tax provisions of the previously separate companies before their respective
acquisitions by SNC. Not all of the entities acquired were subject to income
taxes prior to their respective acquisitions by SNC. Also, for the period from
January 1, 1996 until its reorganization of September 24, 1996, Snyder
Communications had elected to be treated for federal and certain state income
tax purposes as an S corporation, and therefore, the stockholders of Snyder
Communications were taxed on their proportionate share of Snyder
Communications' taxable income, and Snyder Communications did not have an
obligation to pay income taxes. Pro forma net income discussed below includes a
provision for income taxes, as if all operations of Snyder Communications had
been taxable as a C corporation in 1996. All of the 1996 results from the
original operations of Snyder Communications entities which had elected S
corporation status are included in SNC.

Discontinued Operations. The loss from discontinued operations in 1997
consisted of a loss of $8.7 million from the health care services group and a
loss of $1.5 million from BWA. The loss from discontinued operations in 1996
consisted of $0.1 million in income from the health care services group offset
by a $1.5 million loss from BWA. The 1997 loss within the healthcare services
group was due primarily to the nonrecurring acquisition and related costs and
the recapitalization costs recorded in 1997.

Extraordinary Item. In October 1996, Snyder Communications redeemed in full
the subordinated debentures and recorded an extraordinary loss of $1.2 million,
net of income taxes. The extraordinary loss consisted of prepayment penalties
and the write-off of unamortized discount and debt issuance costs.

Net Income (Loss). SNC's net income decreased $39.7 million to a loss of
$26.7 million in 1997 from income of $13.0 million in 1996. The net loss
recorded in 1997 is due primarily to SNC's nonrecurring acquisition and related
costs and compensation to stockholders offset by SNC's overall growth.

Pro Forma Income (Loss) from continuing operations. Pro forma income (loss)
from continuing operations decreased $30.4 million to a net loss of $18.5
million in 1997 from net income of $11.9 million in 1996. The nonrecurring
costs recorded in 1997, offset by the growth of SNC, resulted in the overall
decrease in pro forma income (loss) from continuing operations. Pro forma
income from continuing operations adjusted to exclude nonrecurring costs and of
compensation to stockholders, ESOP expense, recapitalization costs and
acquisition and related costs increased $3.8 million to $22.0 million in 1997
from $18.2 million in 1996. The increase in pro forma income from continuing
operations adjusted to exclude nonrecurring costs is consistent with the
overall growth of SNC.

Liquidity and Capital Resources

At March 31, 1999, SNC had $56.4 million in cash and equivalents. Cash and
equivalents increased $8.5 million during the three months ended March 31,
1999, due to the $9.3 million provided by operating activities from continuing
operations and the $8.4 million provided by financing activities from
continuing operations offset by the $3.2 million used in investing activities
for continuing operations, the $0.3 million effect of changes in the exchange
rate and $5.8 million used by discontinued operations. The $8.4 million in cash
provided by financing activities consists primarily of the proceeds received
from the exercise of stock options offset by net repayments of debt. The $3.2
million in cash used in investing activities consists primarily of capital
expenditures offset by net cash received from a purchased subsidiary. Cash and
cash equivalents decreased $23.9 million for the year ended December 31, 1998,
due to $49.3 million used in investing activities for continuing operations and
$42.8 million used by discontinued operations, offset by $27.1 million provided
by operating activities from continuing operations, $40.4 million provided by
financing activities from continuting operations and $0.7 million effect of
exchange rates changes. The $49.3 million used in investing activities for
continuing operations consists primarily of cash used for capital expenditures
and the purchase of subsidiaries. The $40.4 million provided by financing
activities from continuing operations consists of investments and advances from
Snyder Communications offset by net repayments of debt.

SNC believes that its cash and equivalents, as well as the cash provided by
operations and available financing, will be sufficient to fund its current
operations, planned capital expenditures and anticipated growth.

SNC has undergone an assessment of its current systems and equipment and is
in the process of finalizing modifications necessary to address the issues
presented by the year 2000. We expect that our systems will be

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year 2000 compliant and that additional expenses related to the modifications
will not be material. However, we cannot assure you that this will be the case
until these systems are operational in the year 2000.

SNC is subject to the impact of foreign currency fluctuations, specifically
that of the British pound. To date, changes in the British pound exchange rate
have not had a material impact on SNC's liquidity or results of operation. SNC
continually evaluates its exposure to exchange rate risk but does not currently
hedge such risk.

Given the extent of its services currently provided in continental Europe and
the nature of those services, we do not expect the introduction of the Euro to
have a material impact on SNC's operations or cash flows. SNC will continue to
evaluate the impact of the introduction of the Euro as it continues to expand
the services offered and the European locations in which it operates.

Effect of Inflation

Because of the relatively low level of inflation experienced in the United
States and Europe, inflation did not have a material impact on SNC's
consolidated results of operations for 1998, 1997 or 1996.

Quantitative and Qualitative Disclosures About Market Risk

At December 31, 1998, SNC had approximately $12.3 million of long-term debt.
Based upon the relative insignificance of long-term debt to SNC's financial
position, we do not believe that it has significant exposure to the volatility
of interest rates. Approximately 32% of SNC's revenues are earned outside of
the United States, with the majority earned in the United Kingdom and the
remainder earned largely in France and Germany. All foreign operations incur
both income and expenses in their local currency, and accordingly, we do not
believe it has significant economic exposure to fluctuations in foreign
exchange rates. Because SNC is required to report its foreign operations as if
they had been incurred in U.S. dollars, fluctuations in foreign exchange rates
could have a detrimental impact on the reported financial results under
generally accepted accounting principles. SNC does not currently engage in
hedging or other market risk management tools.

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SNC--BUSINESS

General

SNC is one of the world's leading international full-service direct
marketing, advertising and communications agencies, with operations throughout
the United States, the United Kingdom and continental Europe. We provide direct
marketing services to clients through BrannWorldwide and Bounty SCA Worldwide
and advertising services through Arnold Communications. Our clients are
primarily global companies with large annual sales and marketing expenditures
facing significant competitive pressures to retain or expand their respective
market share. These clients operate in a broad range of industries, including
automotive, consumer packaged goods, financial services, telecommunications and
gas and electric utilities.

Industry Overview

The direct marketing, advertising and communications industry provides a
variety of services used to develop and deliver messages to both broad and
targeted audiences through a wide range of communication channels. The industry
includes traditional advertising services as well as other marketing and
communications services, such as direct and database marketing, sales
promotion, public relations, branding consultation and other specialized
services.

Direct marketing channels, which include direct mail, personal contact and
direct response media, enable the delivery of a customized marketing message to
a targeted business or consumer segment. Unlike most traditional advertising
mediums, the response of targeted customers to direct marketing programs can be
accurately measured. This allows marketers to quickly evaluate, refine and
improve their direct marketing programs and to measure the financial returns on
investments in such programs. Demographic shifts and lifestyle changes,
increasing competition among businesses, deregulation in certain industries,
and a proliferation of new products and services have contributed to the
increasing cost and complexity of traditional advertising programs in recent
years. As a result, many marketers have responded to these pressures by
allocating a larger percentage of their advertising budgets to direct marketing
programs.

Direct marketing expenditures have grown significantly in recent years and
this growth is expected to continue. According to a 1998 study by the WEFA
Group, overall media spending worldwide for direct marketing initiatives was
expected to reach $162.7 billion in 1998, representing a 6.8% increase over
1997 expenditures and a compound annual growth rate of 7.9% since 1993. The
WEFA Group also estimates that these expenditures will continue to grow through
2003 at an annual growth rate of 6.4% with total expenditures in excess of $221
billion. We believe that we are well positioned to benefit from the continued
growth and acceptance of direct marketing as an effective alternative or
complement to traditional advertising methods.

According to industry sources, worldwide advertising expenditures were
approximately $415 billion in 1998, representing an increase of approximately
5.0% in 1998 and a five-year compound annual growth rate of approximately 7.0%
since 1993. Advertising expenditures in the United States were approximately
$200 billion in 1998, representing an increase of approximately 7.0% in 1998
and a five-year compound annual growth rate of approximately 7.0% since 1993.
United States advertising expenditures are expected to grow approximately 6.0%
in 1999 to $212 billion representing approximately 49% of worldwide advertising
expenditures.

Industry Trends

Several significant trends are changing the dynamics of the direct marketing,
advertising and communications industry, including the following:

. Growth In Direct Marketing, Advertising and Communications Markets. The
globalization of markets and the deregulation of several sectors of
domestic and international markets have led to

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growth in demand for direct marketing, advertising and communications
services by large corporate clients. An increasing number of companies
are expanding globally and, where they consider it appropriate, are
seeking consistent brand images and market positions for their products
throughout the world. In industries where regulatory developments have
encouraged increased competition among industry participants, such as in
the telecommunications and utilities industries, a growing number of
companies have sought to establish and enhance their brand images
through comprehensive direct marketing, advertising and communications
programs. We expect to benefit from the continued growth of these
markets.

. Increased Emphasis on Direct Marketing. The desire of companies to reach
their target audiences and quantify the effectiveness of their
communications has resulted in greater demand for customized direct
marketing methods, such as database marketing, cooperative product
sampling and field sales and marketing. These techniques enable
companies to quantify the success of their campaigns and monitor the
return on investment of their marketing expenditures using mechanisms
such as response rate tracking. A significant majority of our business
operations are focused on targeted direct marketing services. Therefore,
we believe that we are well positioned to benefit from this increasing
demand.

. Increased Focus on Brand Development. In recent years, advertisers have
increasingly focused on the image or brand identity of their
organizations, products and services in an effort to differentiate
themselves from competitors and increase brand loyalty. This emphasis on
brand development has increased the demand for delivery of consistent
messages. As a result, companies are seeking direct marketing,
advertising and communications organizations that coordinate resources
across multiple disciplines, geographies and media. We believe we are
well positioned to take advantage of this trend by using our "Brand
Essence" strategic and creative philosophy. We discuss this philosophy
under "--Growth Strategy" below.

. Demand for Integrated Service Offerings. Increasingly, companies are
turning to large direct marketing, advertising and communications
organizations to provide integrated services across multiple
disciplines. These integrated services ensure a consistent brand
presence, maximize the effectiveness of their messages around the world,
better coordinate their marketing activities and simplify and strengthen
their relationships with their marketing partners. This demand for
integrated services has led to the creation of a small number of global
direct marketing, advertising and communications companies, including
SNC, that strive to provide their clients with a full range of services
in each of the local markets in which their clients operate.

Growth Strategy

Our growth strategy consists of the following key components:

. Capitalize on Existing Networks. We believe that BrannWorldwide, Bounty
SCA Worldwide and Arnold Communications have established themselves as
some of the world's leading direct marketing and advertising agency
networks. In 1998, BrannWorldwide was ranked as the largest direct
marketing agency in the world by the Direct Marketing Association.
Bounty SCA Worldwide, SNC's sales promotion and specialty direct
marketing agency, was not ranked separately at that time. We believe,
however, based on total billings, that Bounty SCA Worldwide is currently
among the top three direct marketing agencies in the world. For more
than 25 years, Arnold Communications, a leading advertising and
communications organization, has been consistently recognized for
creative excellence across multiple industries. We believe that
continuing to invest in and leverage our existing networks will
facilitate their continued growth. Furthermore, with a presence in the
United States, the United Kingdom and continental Europe, we believe
that we are well positioned to continue to benefit from the trend toward
the globalization of direct marketing, advertising and communications
needs and the consolidation of those needs with a single international
service provider.

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. Increase Penetration of Significant Clients. We have built long-standing
relationships with significant clients, including McDonald's, Zeneca,
Volkswagen of America, IBM and Procter & Gamble. We believe that there
are significant opportunities to increase our share of companies' direct
marketing, advertising and communications expenditures by leveraging our
global network to provide integrated services to these companies. We
have successfully increased our share of the direct marketing,
advertising and communications expenditures of some of these companies
over the past few years. For example, we have significantly expanded our
relationship with Fleet Financial and now provide both advertising and
direct marketing services for Fleet. We believe that Fleet consolidated
its advertising and direct marketing accounts with us in order to ensure
that it presents a consistent brand identity to its customers across a
broad range of communications channels. We believe that we are well
positioned to leverage our global network and expand the services we
provide to many of our significant clients.

. Develop New Client Relationships. We believe that there are significant
opportunities for future revenue and profit growth by providing services
to new clients in targeted industry sectors and to those clients seeking
to build and maintain global, regional and local brands. We have
successfully used our integrated and global approach as an effective
tool in winning new business. For example, BrannWorldwide won the
PeopleSoft Education Services direct marketing business in February
1999. Education Services markets training to both the PeopleSoft
customer/partner base and to public information technology
professionals. Anticipated work in 1999 includes direct mail, print
advertising, research and surveying of existing and prospective
customers and promotional kits and other sales support materials.
BrannWorldwide's first work for this client was a mailing to
approximately 200,000 information technology professional consultants
nationwide and in Canada in June 1999. Based on our successful working
relationship to date, Education Services has recommended BrannWorldwide
to other divisions within its corporation.

. Maintain Creative Excellence. We intend to continue emphasizing the
importance of creative marketing and communications. Our creative
leadership has been recognized over the years through the receipt of
various industry awards. For the fourth consecutive year, BrannWorldwide
received the prestigious Partners in Progress award from Sears, Roebuck
and Co., based on its extensive work and high quality service for Sears'
Credit Division. Brann also received an Echo award in the Direct
Marketing Association's international competition that recognizes
exceptional results and creativity in direct marketing. Brann was ranked
1st in Precision Marketing's Top 100 Agencies Survey, and in the 1998
Marketing Week Reputations Survey, more people placed Brann in the top
three among all disciplines than any other agency. The Marketing Week
survey ranks Brann 1st in six categories and 2nd in two categories.
Arnold Communications was awarded Advertising Age's prestigious Best for
1997 award for excellence in advertising. The winning spot was Arnold
Communications' "Sunday afternoon" commercial for Volkswagen's Golf,
with the now famous "Da, da, da" background lyrics. Arnold
Communications also won the top Grand Prix award in the print category
at the 45th Annual Cannes International Advertising Festival, the top
prize at the 1998 Kelly Awards and the New York Ad Club's 1999 Grand
Andy Award. We believe that our creative excellence enables us to
provide innovative solutions to our clients' marketing challenges.

. Utilize "Brand Essence" Strategic and Creative Philosophy. To assist our
clients in building, leveraging, protecting and managing their brands,
we have developed an approach to serving clients that we call "Brand
Essence." Brand Essence identifies and sells the rational attributes of
a brand in an emotional way that connects with today's consumers. The
two components underlying this philosophy are:

. the rational, which communicates what the brand stands for that
makes it unique; and

. the emotional, which communicates how the brand looks and feels at
its best.

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We believe that the Brand Essence approach has been a significant factor in
attracting new clients and winning new assignments from existing clients,
and that knowledge of consumers' changing perceptions of brands will
continue to provide us with a significant competitive advantage.

Operations

Our direct marketing services are provided to clients through BrannWorldwide
and Bounty SCA Worldwide. Our advertising services are provided through Arnold
Communications.

BrannWorldwide

We provide full scale direct marketing and sales solutions through the
BrannWorldwide network. BrannWorldwide focuses on the communications points
where clients and their customers come into direct contact with each other in
order to optimize customer identification, acquisition and retention. To
accomplish this objective, BrannWorldwide provides its clients with the
services described below.

Strategic Planning and Consulting. Strategic planning is the initial stage of
the development of a direct marketing program. In this stage, we:

. assess our client's business, profit and sales objectives;

. define the target market; and

. develop direct marketing plans and programs to achieve the client's
objectives.

Our creative staff typically develops the marketing message, produces the art
and images and designs the direct marketing materials. Our media and research
staff are also involved throughout the design, production and execution of the
client's direct marketing program by assisting in developing the marketing
message and identifying the target audience through the use of qualitative and
quantitative market research techniques, statistical modeling and the analysis
of demographic segments.

Data Warehousing and Modeling. Data warehousing and modeling involves
collecting and analyzing client transaction data and other data from
commercially available consumer lists into an integrated database that is used
to predict consumer responses. Data modeling enables BrannWorldwide to predict
the results of a direct marketing program and enables clients to quantify and
measure the return on their marketing investment. BrannWorldwide uses a
combination of proprietary statistical models to predict consumer response and
marketing program profitability. One of these types of models is
BrannWorldwide's Cultivation Opportunity IndexSM, which is a matrix scoring
model that uses proprietary, multi-variant algorithms to determine lifetime
customer value. This modeling process helps to predict the longevity and
profitability of a customer relationship by determining the likelihood and time
of a customer's attrition or defection. This model will also predict a
prospect's willingness and likelihood to respond to a specific offer.
BrannWorldwide uses this modeling process to craft client marketing programs to
maximize profitability.

Database Management. BrannWorldwide builds and runs outsourced customer
information systems, databases and direct marketing systems for its clients. We
develop and maintain customer databases for our clients as well as manage
customer data on specific direct marketing campaigns. Our management of
customer data enables us to deliver direct marketing communications to targeted
markets.

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Direct Mail. BrannWorldwide assumes responsibility for the editorial content
and graphic design of the direct marketing pieces, arranges for the
communications to be produced, executes the campaign and handles inbound
customer responses. As part of our full service offering, we create and manage
direct mail programs for our clients. We develop the editorial content and the
creative design of marketing materials used in a client's program. We also
manage customer responses to many of our clients' programs. We play an
important role in managing the process of producing our clients' direct
marketing materials. Through our own production capabilities and through
numerous vendor relationships, we manage the production of hundreds of millions
of direct mail pieces on an annual basis. We believe our expertise in managing
large scale direct mail programs is a significant competitive advantage.

Field Marketing. BrannWorldwide's field sales representatives make face-to-
face contact with potential customers at the customers' offices or homes and at
local events. Field sales representatives who are targeting consumer
residential customers focus their sales efforts on event marketing, mainly at
fairs, festivals and shopping malls. Field sales representatives who are
targeting business customers typically call on small businesses either on a
"cold call" basis or, increasingly, from leads generated by our direct mail or
database marketing efforts. BrannWorldwide also provides field marketing
services which include reporting and data analysis, distribution and in-store
merchandising.

Return on Investment Evaluation. In addition to creating and executing
strategic marketing plans for its clients, BrannWorldwide also analyzes the
results of marketing programs. This allows BrannWorldwide to provide an
evaluation of the performance of its clients' marketing campaigns.
BrannWorldwide's clients' marketing needs are constantly changing, and through
the analysis of the effectiveness of a particular marketing plan,
BrannWorldwide provides its clients with a real-time evaluation of the clients'
return-on-investment in BrannWorldwide's services.

Case Study--Creating a Direct Marketing Campaign for Associates MasterCard

The Associates is a company that targets MasterCard offers to college
students. The Associates wanted to find a way to stand out through the barrage
of credit card offers that college students receive every day and turn a
traditionally high-risk consumer group into a lucrative customer base.
BrannWorldwide was chosen to accomplish this task.

Through its research and knowledge of the college market, BrannWorldwide
determined that college students are wary of advertising messages from large
companies. With that in mind, BrannWorldwide developed an integrated direct
marketing campaign that college students could connect with on an emotional
level. Mailings with "cool" graphics set the Associates mailings apart from
conservative mailings that were being sent out by other banks attempting to
reach the same target market. The graphics were accompanied by short copy that
quickly outlined the benefits of the Associates MasterCard and created a
package that could be scanned in seconds, understood completely and responded
to immediately.

A typical mailing would include the following:

. a 6 X 9 outer envelope with copy that reads "Free from parental rule at
last. Now all you need is money." The visual is a wide-angle photograph
of a college student holding up a giant Associates MasterCard with the
words "CHA-CHING!" beside the card;

. a letter that contains an icon side-bar with subheadings that quickly
highlight the benefits of the Associates MasterCard, including a "3%
cash back" sticker to call attention to the key benefit; and

. a brochure that contains pictures and short copy that quickly outlines
the card's benefits to the student.

This program has been extremely successful. The BrannWorldwide mailings
received a 50% greater response than the packages previously used by the
Associates. As a result, the Associates has adopted this package as its
standard for the college market.

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Bounty SCA Worldwide

We provide sales promotion and specialty marketing services through our
Bounty SCA Worldwide network. Bounty SCA provides one-on-one consumer access
and analysis for its clients by building proprietary channels to the consumer.
Bounty SCA defines consumers needs and understands how these needs translate
into consumer purchasing. Bounty SCA uses cooperative and custom product
sampling distribution channels, proprietary publications, WallBoards(R) and
other information displays, data mining and direct response marketing to reach
these consumers.

Cooperative/Custom Product Sampling. In its cooperative and custom product
sampling programs, Bounty SCA Worldwide distributes product samples to targeted
consumer groups. Sample packs typically contain a variety of sample products,
coupons and literature. Sample packs are given away for free in areas where
targeted consumers are frequently present, such as schools, physician offices,
college dormitories, child-care centers and hospital maternity wards.
Participating locations sign a two- or three-year exclusivity agreement stating
that the pack will be the only sampling program allowed at the location during
that time. Sample packs provide a vehicle for distributing products and
information to targeted customers at a time when they are most interested in
trying new products. Two examples of Bounty SCA's sample pack programs are the
Diabetes Pack, which is distributed to diabetes patients in endocrinologist
offices and the Good Stuff program, which is distributed to college freshmen in
their dormitory rooms.

Bounty SCA Worldwide provides targeted product sampling programs in the
United States and the United Kingdom through distribution channels that
currently include approximately 80,000 day care centers and pre-schools,
approximately 57,000 elementary schools, approximately 25,000 middle, junior
and senior high schools, approximately 2,800 four-year colleges, approximately
6,000 hospitals and maternity wards and over 21,000 offices of physicians and
specialty health providers. Sponsors of these programs include various
divisions of Procter & Gamble, and, alphabetically, Clorox, Helene Curtis, HJ
Heinz, Johnson & Johnson, Kellogg, Kraft, Lever Brothers, Reckitt & Coleman and
Ross/Abbott Labs. Bounty SCA has established alliances with leading
associations, such as the American Diabetes Association and the Arthritis
Foundation, which permit us to recognize these associations as our marketing
partners.

Proprietary Publications. Bounty SCA Worldwide generally includes proprietary
literature in its sample packs to enhance their value to the consumer, as well
as to provide us with an additional source of revenue and an additional means
of collecting data. The proprietary literature contains information, coupons
and advertisements relevant to the particular targeted consumer market that
receives each sample pack. Bounty SCA distributes this literature as part of
programs targeting high school teens and elementary school parents each spring
and fall, working mothers close to Mother's Day and college students each fall.
Bounty SCA provides proprietary health-oriented publications to expectant
mothers, new mothers and parents of toddlers, including The Bounty Pregnancy
Guide, The Bounty Baby Care Guide and The Bounty Young Family Guide. In
addition to these titles, Bounty SCA publishes hospital information booklets on
behalf of nearly 150 maternity hospitals for distribution to expectant mothers.
All of these publications are funded through advertisements and are distributed
free of charge.

WallBoards(R) and Other Information Displays. WallBoards(R) are framed
information and sponsored displays that are mounted in high traffic consumer
areas. WallBoards(R) present educational, editorial and product information
that is targeted to specific user groups. These boards are located in areas
where the targeted customers are likely to be waiting for services and,
therefore, are likely to be interested in receiving information and trying new
products, such as child-care centers and corporate airport terminals. Each
WallBoard(R) location is generally available to us under a two- or three-year
exclusive agreement with automatic renewal provisions. The WallBoard(R)
locations provide the space free of charge because of its perceived benefit to
the targeted audience. Each of the WallBoard(R) sponsors has "category
exclusivity" for their product in their program. Two examples of our
WallBoard(R) information displays are:

. Heart Health WallBoard(R), which targets cardiology patients; and

. Your Kids WallBoard(R), which targets working parents.

Examples of the corporate sponsors of our WallBoard(R) information displays
include, alphabetically, Gerber, Hoechst Marion Roussel, Kellogg and Quaker
Oats. As with its cooperative/customer product sampling

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programs, Bounty SCA has established alliances with associations that
specialize in the particular targeted area, such as the American Heart
Association and the National Child Care Association.

Bounty SCA Worldwide also operates information centers in retail outlets
through its Good Neighbor program. The Good Neighbor information centers are
displays which include pockets for take-one literature, tear-off pads for the
distribution of rebate offers and recipes, mini-posters which contain consumer
information and commercial messages, and free ad cards for individuals to offer
products or services.

Data Mining. Bounty SCA Worldwide has compiled demographic marketing
databases of more than 48 million individuals and 2 million small businesses.
These proprietary databases consist primarily of high school students, young
adults, new parents and religiously and ethnically distinct individuals. We
license these databases to brokers, advertising agencies and end-users that
employ direct marketing campaigns.

Direct Response Marketing. Bounty SCA Worldwide also provides services to
direct response companies. Direct response companies sell their products or
services directly to their customers without the use of retail space or other
public outlet of distribution. These companies use either an order form or
toll-free number as the only means of client acquisition. These same companies
must find cost-effective means of advertising to reach their audiences, solicit
existing customers and secure new customers. Bounty SCA creates and manages
sales programs for its direct response clients from various media alternatives.
Bounty SCA's print media advertising products include newspaper and magazine
insertions, package inserts, billing envelopes, catalogs and numerous other
freestanding inserts and on-page opportunities. Bounty SCA utilizes its
proprietary databases when designing a program for a particular client. The
client is given a detailed proposal including program samples, circulation and
participation of other clients.

Case Study--Creating a Marketing Campaign for Procter & Gamble

A hair care product unit of Procter & Gamble recently relaunched one of its
branded lines of shampoos and conditioners. As a result, the brand needed to
maximize the trial of, and create awareness and demand for, these products.
Bounty SCA Worldwide was chosen as the program manager responsible for
accomplishing these goals.

Bounty SCA Worldwide determined to develop a unique multi-faceted plan to
engage the consumer and provide a memorable experience to create a high value,
quality impression on the part of the consumer. Bounty SCA used its consumer
insight to develop the materials that would best couple the needs of the brand
with those of its targeted market--the teen and young adult consumer.

Bounty SCA Worldwide designed a customized product sampling program to
distribute product samples, utilizing a premium satin-type bag to hold the
shampoo and conditioner samples. As part of this program, Bounty SCA will
distribute millions of samples through its national networks of middle, junior
and senior high schools and colleges and universities. In connection with this
program, Bounty SCA is responsible for the manufacturing of the satin bags to
hold the product samples, the fulfillment of the delivery of the product
samples to the target market and overall project management.

Bounty SCA Worldwide is also considering a "Surround the Teen" approach which
would strategically place a brand message in front of the target audience
throughout the day in a non-obtrusive manner. In developing this approach,
Bounty SCA analyzed daily teen activity to identify the key intervention
points. This analysis created the following ideas:

. targeted "Teen Net" outdoor media using Bounty SCA's proprietary
"pinpoint placement" methodology which provides a targeted capability
for a media channel that traditionally was used for a broad-scale
audience;

. a student resource center located in senior high schools that would
include upcoming activities and brand advertising;

. in-school events that focus on teen leadership; and

. school book covers and locker posters advertising the brand's products.

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Arnold Communications

Our advertising and public relations business is operated through our Arnold
Communications network. Arnold Communications provides a broad range of
services to create a uniform, appropriate message that builds brand appeal,
using a variety of mediums such as television, radio, print and sales
promotion. Some of Arnold Communications' major clients include,
alphabetically, Bell Atlantic, Bose, Fleet, McDonald's, Mobil, Ocean Spray,
SAP, Titelist and Volkswagen.

Arnold Communications consists of various divisions, including without
limitation:

. a full-service, creative advertising agency;

. a media planning and purchasing organization;

. a full-service public relations agency;

. a design firm serving regional, national and international clients; and

. a company dedicated exclusively to the design, implementation and
placement of national and regional Yellow Pages advertising programs.

In developing advertising campaigns for its clients, Arnold Communications
relies upon its Brand Essence philosophy. The Brand Essence approach begins by
studying existing data on a particular clients' brand. Arnold Communications
then conducts consumer research to determine what are the brand's strongest
selling points through one-on-one interviews with consumers and development
focus groups. We use this information to determine what sets the brand apart
from its competitors, what images and feelings the brand conjures up in their
minds and what makes the brand, as well as the category, important in their
lives. The information is then used to develop a full campaign.

Case Study--Creating a New Brand Image for SAP

SAP is the world's largest enterprise software company and its enterprise
resource software, R/3, is generally regarded as the world's leading enterprise
software in terms of quality and product superiority. SAP created the
enterprise resource planning software category and enjoyed market domination
for nearly five years. Customer perceptions regarding the cost and complexity
of the software allowed competitors to capture significant market share.
Although SAP was still the category leader with over 30% market share, low
awareness outside the category, negative publicity and competitive attacks had
weakened the brand and tarnished its image. Our goal was to effectively change
the market place perceptions and strengthen SAP's leadership position.

To get a true understanding of the perceptions of SAP, Arnold Communications
conducted extensive primary research among existing and prospective SAP
clients. The research confirmed that while customers perceived R/3 to be the
best product available, they were also influenced by the negative publicity
surrounding SAP. This negative publicity and word of mouth were seriously
damaging the appeal of the brand. The key to changing consumers' perceptions
was to create a new Brand Essence that would highlight the positive benefits of
increased knowledge and improved efficiency while turning the negative
perceptions regarding cost and complexity into positives.

Arnold Communications developed a Brand Essence that speaks to the benefit of
R/3--better information and a better return on investment. "A Better Return on
Investment" says that you'll capture far more from the information you
currently have and that the long-term results will greatly outweigh the short-
term difficulties. The advertising that was developed featured friendly people
and focused on the benefits of increased speed, greater profitability and
improved knowledge. It humanized the company and cut through the
misperceptions. It also created a unique layout that reinforced and
strengthened SAP's logo. The advertising was launched in January 1997 utilizing
a heavy insertion schedule in business and trade publications, direct
marketing, Internet

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and sales materials. Arnold Communications also helped SAP take this brand
positioning campaign to four continents. Based on our effectiveness in these
international markets, Arnold Communications was also chosen as the agency of
record for SAP Canada.

In 1997, SAP posted an unprecedented 60% growth in sales year-over-year.
SAP's revenues grew to $3.7 billion and earnings per share grew 50%. Growth
continued throughout 1998, with revenues totaling $5.05 billion and 10,000 plus
customers in 197 countries. Worldwide installations of R/3 also increased 44%
to approximately 20,000. In 1999, SAP still commands 36% of the enterprise
resource planning market verses 10% for Oracle, its nearest competitor.

Case Study--Establishing a Leadership Position for Fleet Bank's Business and
Entrepreneurial Services Group

In the early 1990's, Fleet Bank proactively addressed the changing economic
and business condition of New England by fundamentally changing the way they
operated their small business banking unit. The unit grew from a virtual start-
up to the largest small business banking franchise in the Northeast. However,
Fleet recognized that their success would endure only if they continued to
exceed the expectations of their small business customers and offer innovations
in product and technology development. As a result, Fleet redesigned its small
business group and introduced the Business and Entrepreneurial Services Group
as a new business line. The group partners with its customers to provide all
the financial tools needed by the "small business" customer.

Fleet wanted to promote and generate interest in the group's key products--
specifically the Easy Business Package, which is a relationship account for
businesses. The account helps business owners organize, manage and control
their finances by providing a checking account, a money market savings account
and overdraft protection, all in one combined statement. For 1998, Fleet's
specific goals were to increase purchase consideration for the product and
increase deposits through the sale of Easy Business Packages.

Arnold Communications analyzed the business and together with Fleet,
determined the best target for the product. Arnold Communications recommended
that Fleet position the Easy Business Package as a banking product specifically
designed to make it easier for a business owner to organize, manage and control
finances in one convenient place. The campaign positioned the package as a
partner that understands the time and financial demands business owners have.

By using a broad mix of high-profile media for a thirteen-week period, Arnold
Communications established for Fleet a powerful leadership position that was
both authoritative and targeted.

Competition

The direct marketing, advertising and communications industry is very
competitive and highly fragmented. Our principal competitors are large
multinational direct marketing, advertising and communications companies, as
well as numerous smaller agencies that operate only in the United States or in
one or more countries or local markets. We must compete with these other
companies and agencies to maintain existing client relationships and to obtain
new clients and assignments. Many of the other firms offer a limited number of
services within a limited geographic area, but there are several participants
whose businesses tend to be national or international and offer a broad array
of marketing services. Our competitors generally include the direct marketing
and advertising operations of the following groups, listed alphabetically,
Interpublic Group of Companies, Omnicom Group, WPP Group and Young & Rubicam,
Inc.

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companies such as systems integrators, database marketing and modeling
companies and telemarketers, which offer technological solutions to marketing
and communications issues faced by clients. In addition, the trend toward
consolidation of global accounts requires companies seeking to compete
effectively in the international direct marketing, advertising and
communications industry to make significant investments. These investments
include additional offices and personnel around the world and new and improved
technology for linking these locations and people.

We believe that some of these competitors may have capabilities and resources
comparable to and in some respects greater than ours. We also compete with the
internal marketing capabilities of our clients and potential clients. In
addition, many of our initial sources for names in our databases could also be
available to a competitor wishing to develop a data delivery business.

We believe that we compete primarily on the following bases:

. our ability to provide clients with integrated marketing solutions for
their sales and marketing needs;

. our proprietary databases and programs;

. our creative and consulting expertise;

. our demonstrated ability to attract customers;

. our reputation for quality;

. our proprietary distribution channels with respect to information
displays and sample packs; and

. our technological expertise.

Regulation

Our business is subject to government regulation, both within and outside the
United States. In the United States, federal, state and local governments and
their agencies and various consumer groups have directly or indirectly affected
or attempted to affect the scope, content and manner of presentation of
advertising. The continued activity by these groups regarding advertising may
cause further change in domestic advertising practices in the coming years. We
are unable to estimate the effect of these developments on our business in the
United States. We believe, however, that the total volume of advertising in
general media in the United States will not be materially reduced due to future
legislation or regulation, even if the form, content and manner of presentation
of advertising may be modified. In addition, we will continue to endeavor to
become aware of and be responsive to the possible implications of these
developments.

In addition, from time to time, state and federal legislation is proposed
with regard to the use of proprietary databases of consumer and health groups.
The uncertainty of this regulatory environment is increased by the fact that we
generate and receive data from many sources. As a result, there are many ways
that both domestic and foreign governments might attempt to regulate our use of
this data. Any restriction on this use could have a material adverse effect on
our company.

Our services offered outside the United States may be subject to foreign
regulations including those relating to advertising content, promotions of
financial products, activities requiring customers to send money with mail
orders and the maintenance and use of customer data held in databases. We
believe that our operations outside the United States are substantially in
compliance with applicable regulations. We cannot assure you that additional
legislation or changes in the regulatory implementation would not limit our
international activities or significantly increase the cost of regulatory
compliance.

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Management

The senior management of SNC consists of the following individuals:

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Daniel M. Snyder............... 34 Chief Executive Officer
Michele D. Snyder.............. 36 President and Chief Operating Officer
A. Clayton Perfall............. 40 Chief Financial Officer

See "Proposal 1--The Recapitalization Proposal--Management and Allocation
Policies--Fiduciary and Management Responsibilities" for information with
respect to Mr. Snyder, Ms. Snyder and Mr. Perfall.

The senior managers of BrannWorldwide, Bounty SCA Worldwide and Arnold
Communications consist of the following individuals:

<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Christopher Gater.............. 48 Group President--BrannWorldwide
Steven M. Kaplan............... 39 Group President--Bounty SCA Worldwide
Edward Eskandarian............. 62 Group President--Arnold Communications
</TABLE>

Christopher Gater serves as Group President of BrannWorldwide. Mr. Gater
began his career at BrannWorldwide's predecessor as a strategist manager for
major clients' increasing use of database marketing programs. In 1992, his
focus moved to the agency group, creating a marketing information consultancy
team and becoming Vice Chairman. In 1994, Mr. Gater successfully led a team of
directors in a management buy-out and became Chief Executive Officer. Following
the predecessor's merger with Snyder Communications in 1997, he continued to
lead BrannWorldwide's organic growth, taking on responsibility for developing a
new model direct marketing service business worldwide. Mr. Gater takes an
active role in direct marketing professional organizations and serves on
various committees concerning self-regulation of database practices.

Steven Kaplan serves as Group President of Bounty SCA Worldwide. As Group
President, Mr. Kaplan promotes opportunities that capitalize on global consumer
access, consumer relationships and distribution channels, as well as the
strategic strengths of Bounty SCA Worldwide. Before joining Snyder
Communications, Mr. Kaplan was President of a Bounty SCA predecessor. Mr.
Kaplan started with the predecessor in 1981 and acquired it in 1989. During
that time, he was responsible for developing marketing programs for targeted
customers. Mr. Kaplan speaks extensively to industry groups and clients around
the world on a variety of global consumer issues.

Edward Eskandarian serves as Group President of Arnold Communications. Prior
to Snyder Communications' acquisition of Arnold Communications in 1998, Mr.
Eskandarian was President of Arnold Communications for 18 years. He purchased
the company (then called Arnold & Co.) in 1990 and grew the $40 million agency
into the largest New England advertising agency with billings exceeding $900
million. Prior to Arnold Communications, Mr. Eskandarian was Chairman and Chief
Executive Officer of HBM/Creamer, an advertising agency, since 1981. In
addition, Mr. Eskandarian has held numerous executive positions in charitable
and community organizations, including overseer of the Boston Symphony
Orchestra, member of the Executive Council of the American Red Cross of
Massachusetts Bay, Director of Boston Chamber of Commerce, and past President
of Harvard School of Business Administration.

Employees

As of March 31, 1999, SNC employed approximately 7,000 persons worldwide. We
believe that our relations with SNC employees are satisfactory. None of our
employees are represented by a labor union, nor have we ever experienced a work
stoppage.

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Properties

Our corporate headquarters are located in Bethesda, Maryland in leased
facilities. We also lease facilities in:
<TABLE>
<CAPTION>
<S> <C>
.San Francisco, California .Brussels, Belgium
.Danbury and Wilton, Connecticut .Toronto, Canada
.Atlanta, Georgia .Bristol, England
.Chicago and Glenview, Illinois .London, England
.Boston, Massachusetts
.New York City and Mineola, New York
</TABLE>

In addition, we own office space in:

. Richmond, Virginia

. Cirencester, England

. Diss, England

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CIRCLE.COM--MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

Circle.com is engaged in the Internet professional services business.
Circle.com's services include Internet-based strategic consulting, consumer
research, online media planning and creative design, which it refers to as
"front-end services," as well as systems integration, e-commerce architectures,
automated marketing systems and performance diagnostics, which it refers to as
"back-end services." Until May 1999, the operations of circle.com were
contained within the BrannWorldwide and Arnold Communications networks of
Snyder Communications. In May 1999, these operations were coordinated under the
name circle.com and placed under the responsibility of a single management
team.

Results of Operations

Net revenues from Internet professional services are generally based on
either a fixed project amount or the time and materials utilized.

Professional services expenses consist primarily of compensation and benefits
of our employees engaged in the delivery of professional services.

Office and general expenses include costs associated with administrative
functions, such as finance, human resources and information technology, as well
as amortization of intangibles and office facilities costs. A portion of Snyder
Communications' overhead and administrative shared services have been allocated
to circle.com based upon estimated usage.

The following sets forth, for the periods indicated, certain components of
circle.com's income statement data, including such data as a percentage of
revenues. Pro forma net income includes a provision for income taxes as if all
operations of circle.com had been taxed as a C corporation for all periods
presented.

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Three Months Ended March 31, 1999, Compared to Three Months Ended March 31,
1998

Net Revenues. Circle.com's net revenues increased $3.6 million, or 212%, to
$5.3 million in the first quarter of 1999 from $1.7 million in the first
quarter of 1998. This includes approximately $1.4 million of revenue growth
from small purchase transactions completed during 1998. Circle.com experienced
growth in its client base in both the U.S. and the U.K. from the first quarter
of 1998 to the first quarter of 1999, as more companies recognize that the
Internet is an increasingly important marketing tool and an effective way to
reach customers.

Professional Service Expenses. Circle.com's professional service expenses
increased $2.3 million, or 256%, to $3.2 million in the first quarter of 1999
from $0.9 million in the first quarter of 1998. Professional service expenses
as a percentage of net revenues increased to 60.2% in the first quarter of 1999
from 52.8% in the first quarter of 1998. The increase in professional service
expenses is consistent with the increase in personnel providing services at
circle.com.

Office and General Expenses. Office and general expenses increased $2.2
million, or 200%, to $3.3 million in the first quarter of 1999 from
$1.1 million in the first quarter of 1998. Office and general expenses as a
percentage of net revenues decreased to 61.9% in the first quarter of 1999 from
66.0% in the first quarter of 1998 as circle.com has continued to leverage its
infrastructure. The increase in office and general expenses is consistent with
the overall growth at circle.com. The office and general expenses reported
through the first quarter of 1999 do not include any amounts related to the
costs of having publicly traded securities track circle.com's performance.

Income Tax Provision. Circle.com recorded a tax benefit of $0.3 million in
the three months ended March 31, 1999. Circle.com's effective tax rate is
approximately 26.5% for the three months ended March 31, 1999. The effective
rate differs from the statutory rate due primarily to nondeductible differences
resulting from goodwill amortization.

Net Income (Loss). Net loss increased $0.6 million, or 200%, to $0.9 million
in the first quarter of 1999 from $0.3 million in the first quarter of 1998 due
primarily to circle.com's overall growth and consistent operating margins. Pro
forma net loss increased $0.5 million, or 250%, to $0.7 million in the first
quarter of 1999 from $0.2 million in the first quarter of 1998. Pro forma net
loss includes a benefit for federal and state income taxes as if circle.com had
been a taxable C corporation for all periods presented.

Year Ended December 31, 1998, Compared to Year Ended December 31, 1997

Net Revenues. Circle.com's net revenues increased $7.9 million, or 141%, to
$13.5 million in 1998 from $5.6 million in 1997. This includes approximately
$2.4 million of revenue growth from purchase transactions completed during
1998. Circle.com experienced growth in its client base in both the U.S. and the
U.K. Revenues from back-end services provided in the U.S. experienced the most
growth. However, revenues from front-end services and the U.K. operations also
increased.

Professional Service Expenses. Circle.com's professional service expenses
increased $4.1 million, or 137%, to $7.1 million in 1998 from $3.0 million in
1997. Professional service expenses as a percentage of net revenues decreased
to 52.6% in 1998 from 54.7% in 1997. Professional service expenses as a
percentage of net revenues decreased due to increased utilization of client
services personnel. The increase in professional services is consistent with
the increase in personnel providing services at circle.com.

Office and General Expenses. Office and general expenses increased $2.3
million, or 63.9%, to $5.9 million in 1998 from $3.6 million in 1997. Office
and general expenses as a percentage of net revenues decreased to 43.7% in 1998
from 65.0% in 1997. Office and general expenses as a percentage of net revenues
decreased because the infrastructure was expanded and was able to support
increased services.

Income Tax Provision. Circle.com recorded a $0.5 million tax provision on its
income in 1998 and a $1.0 million tax benefit on its loss in 1997. The actual
income tax provision includes the impact of the S corporation status of certain
aspects of circle.com's operations prior to their acquisitions by Snyder
Communications in pooling of interests transactions.

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Net Income (Loss). Net loss decreased $128,000, or 98.5%, to $2,000 in 1998
from a loss of $130,000 in 1997 due primarily to circle.com's overall growth
and improved operating margins. Pro forma net income was $0.1 million in 1998
and a loss of $0.6 million in 1997. Pro forma net income and loss include a
provision or benefit for federal and state income taxes as if circle.com had
been a taxable C corporation for all periods presented.

Year Ended December 31, 1997, Compared to Year Ended December 31, 1996

Net Revenues. Circle.com's net revenues increased $2.3 million, or 69.7%, to
$5.6 million in 1997 from $3.3 million in 1996. Circle.com experienced growth
in both the front-end services and the back-end services provided to its
clients.

Professional Service Expenses. Circle.com's professional service expenses
increased $1.1 million, or 57.9%, to $3.0 million in 1997 from $1.9 million in
1996. Professional service expenses as a percentage of net revenues decreased
to 54.7% in 1997 from 59.3% in 1996. The decrease in professional service
expenses as a percentage of net revenues is due to increased utilization of
resources and personnel.

Office and General Expenses. Office and general expenses increased $1.4
million, or 63.6%, to $3.6 million in 1997 from $2.2 million in 1996. Office
and general expenses as a percentage of net revenues remained fairly consistent
at 65.0% in 1997 and 65.8% in 1996. The infrastructure put in place during 1996
to support front-end services was more efficiently utilized during 1997.
However, the infrastructure to support back-end services was built up during
1997, resulting in fairly consistent office and general expenses as a
percentage of net revenues.

Income Tax Benefit. Circle.com recorded a $1.0 million tax benefit in 1997
and a $0.6 million tax benefit in 1996. The tax benefit recorded in 1997 was
88.2% of the loss from operations, and the tax benefit recorded in 1996 was
71.0% of the loss from operations. The actual income tax benefit includes the
impact of the S corporation status of certain aspects of circle.com's
operations prior to their acquisitions by Snyder Communications in pooling of
interests transactions.

Net Income (Loss). Net loss decreased $0.1 million, or 50%, to $0.1 million
in 1997 from $0.2 million in 1996 due primarily to the increased tax benefit
recorded in 1997. Pro forma net loss includes a benefit for federal and state
income taxes as if circle.com had been a taxable C corporation for all periods
presented. Pro forma net loss increased $0.2 million, or 50.0%, to $0.6 million
in 1997 from $0.4 million in 1996. The increase in the pro forma net loss is
consistent with the increased activity at circle.com during 1997. The increase
in the pro forma net loss was less than the increase in revenues because of
improved operating margins.

Liquidity and Capital Resources

Of the $2.5 million investment from Snyder Communications received during the
three months ended March 31, 1999, $1.3 million was used in operating
activities and $1.2 million was used for capital expenditures. Until May 1999,
the operations of circle.com were contained within the BrannWorldwide and
Arnold Communication networks, and the operations which became circle.com did
not have separately identified cash. Circle.com will maintain its own bank
accounts in future periods.

Circle.com has experienced operating losses, as well as net losses, since it
began operations. If its cash balances and cash provided by operations are not
sufficient to pay its operating or other expenses, circle.com may need to
obtain additional funding from Snyder Communications, borrow money from a third
party, or Snyder Communications may need to issue more shares of circle.com
stock.

Because circle.com shares its systems and equipment with SNC, SNC has
undergone an assessment of these systems with regards to year 2000 compliance.
Circle.com has not undergone a separate assessment. We believe that these
systems and equipment are year 2000 compliant and that significant additional
costs will not

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be incurred. However, we cannot assure you that this will be the case until
these systems are operational in the year 2000. To the extent that any
acquisitions are consummated, circle.com will need to evaluate how the year
2000 will impact those acquirees.

Circle.com is subject to the impact of foreign currency fluctuations,
specifically that of the British pound. To date, changes in the British pound
exchange rates have not had a material impact on circle.com's liquidity or
results of operations. Circle.com continually evaluates its exposure to
exchange rate risk but does not currently hedge such risk.

Effect of Inflation

Because of the relatively low level of inflation experienced in the United
States and Europe, inflation did not have a material impact on circle.com's
consolidated results of operations for 1998, 1997 or 1996.

Quantitative and Qualitative Disclosures About Market Risk

Approximately 16.8% of circle.com's revenues are earned in the United
Kingdom. Its foreign operations incur both income and expenses in their local
currency, and accordingly, we do not believe it has significant economic
exposure to fluctuations in foreign exchange rates. Because circle.com is
required to report its foreign operations as if they had been incurred in U.S.
dollars, fluctuations in foreign exchange rates could have a detrimental impact
on the reported financial results under generally accepted accounting
principles. Circle.com does not currently engage in hedging or other market
risk management tools.

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CIRCLE.COM--BUSINESS

General

Circle.com is a leading Internet professional services provider that creates
Internet-based customer relationship management systems for its Fortune 1000
and emerging Internet-based clients. These systems use our proprietary
technology process to enable our clients to identify, acquire and retain
customers while creating and establishing new revenue channels. We provide all
the services necessary to create these systems, including Internet-based
strategic consulting, consumer research, online media planning and creative
design, which we refer to as "front-end services," as well as systems
integration, e-commerce architectures, automated marketing systems and
performance diagnostics, which we refer to as "back-end services."

Industry Background

Circle.com considers the Internet to be the most powerful tool yet developed
for managing the customer relationships of Fortune 1000 and emerging Internet
companies on a one-on-one basis. The proliferation of the Internet has had a
profound impact on businesses as they begin to realize its potential to extend
and enhance the way they communicate with customers and conduct business.
According to International Data Corporation, a leading research firm, the
number of Internet users was 98 million worldwide at the end of 1998 and is
expected to continue to grow to 320 million by the end of 2002. Forrester
Research estimates that commerce over the Internet will grow from approximately
$43.0 billion in 1998 to $1.3 trillion in 2003.

The Internet was initially used as an informational and advertising medium,
with "read-only" brochure-like information designed to enhance existing forms
of communication. However, these early e-commerce models did little more than
replicate a company's traditional business on the Internet utilizing the
limited processing capabilities of the company's existing technology systems.
Over time, this early focus on simple web design has evolved into a more
integrated model as businesses realized the Internet's potential as an
effective tool for highly targeted marketing. As a result, companies are
reevaluating their Internet strategies and reviewing their entire business
model in order to take advantage of the Internet's capabilities. Circle.com
recognizes the most revolutionary contribution of the Internet is its ability
to successfully manage customer relationships and to acquire and retain
profitable customers and business partners. By utilizing these capabilities,
businesses can get to know their customers and understand what motivates their
purchase decision in real-time. This enables companies to individualize
marketing content and delivery, effectively acquire customers, influence their
behavior and build customer loyalty. With these new capabilities, businesses
are beginning to personalize the online shopping experiences of their
customers. A Jupiter Communications survey conducted in June 1998 reported that
40% of online retailers used some form of personalization and 93% of the
remaining online retailers planned to implement the practice in the next 12
months.

Initially, most companies supplemented their existing internal capabilities
by hiring individuals or companies with the requisite skills and expertise to
implement their Internet strategies. However, as the sophistication of the
Internet has increased, many businesses have been required to outsource a
significant portion of the development, design and maintenance of their e-
commerce applications. These outsourcing needs have generated significant
worldwide demand for Internet professional services providers. International
Data Corporation estimates the market for Internet professional services will
grow from $7.8 billion in 1998 to $78.5 billion in 2003.

Today, many companies are discovering that a majority of the existing
Internet professional service providers either focus exclusively on front-end
services or back-end services. As a result, these firms are often unable to
provide a full-service solution to the increasingly larger and more complex
needs of an expanding and sophisticated client base. For instance, many systems
integrators generally only provide technical skills and systems integration
expertise. Conversely, interactive advertising and database marketing firms
generally only provide strategic consulting and brand marketing skills. We
believe that the rapidly increasing demand for

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effective and productive Internet-based customer relationship management
systems, combined with the inability of many current providers to integrate the
strategic, creative and technical skills demanded by clients, has created
significant market opportunities for full-service Internet professional
services providers such as circle.com.

Client Engagement Approach

To create profitable Internet-based customer relationship management systems
for clients, circle.com employs a framework that allows it to quickly assess
needs, apply resources and improve results. This framework is implemented in a
series of three overlapping phases:

Identification

Many new and existing entrants into e-commerce lack the tools necessary to
accurately assess their true opportunities online. To understand what a
client's online potential may be, circle.com analyzes all components of its
business. We assess all of the factors that may influence the client's online
success, including its data and delivery systems, its existing web presence,
its partnerships and alliances, its target customer base and those customers'
proclivity to e-commerce. As a result of this analysis, circle.com is able to
develop a complete e-commerce business plan that provides a clear road map,
budget, return on investment scenarios and timetable for the creation of an e-
commerce presence or the enhancement of an existing e-commerce effort.

Realization

Timely and effective deployment is a critical component of any successful
Internet strategy. Once a client approves an e-commerce business plan,
circle.com mobilizes resources across all disciplines to coordinate
simultaneous efforts by its various areas of expertise. These areas of
expertise are what circle.com calls its "Centers of Excellence." This approach
brings the best of circle.com's experts to intensely focus on the individual
project requirements and provides the responsiveness necessary to be successful
in the online environment.

Optimization

Circle.com's highly specialized approach involves real-time data analysis
that allows it to continually monitor the e-commerce activities of its clients
and make enhancements as needed. The user experience, type of data deployed,
surrounding communications, offers and linking mechanisms are all analyzed and
altered in real-time, thereby providing our clients with continual improvement
on their return on investment. It is this ongoing role in improving clients'
businesses that has established circle.com's long and successful client
relationships.

Services

Circle.com sees significant strategic advantage in delivering all of the
services necessary to create Internet-based customer relationship management
systems for its clients. By delivering fully integrated services across
multiple parts of a client's business, we become an integral part of our
client's organization, establishing more of a partnership than a vendor
relationship. This promotes long-term client relationships that evolve as the
client's Internet-based business strategy evolves. Among the integrated
services we offer to our clients, we:

. Provide business consultancy services. We collaborate with our clients
to assess their existing business processes, legacy data systems and
customer management approach in light of their business objectives. We
use the information obtained from this analysis to develop business
plans for creating Internet-based solutions for our clients that reduce
the cost of acquiring new customers, establish new revenue channels and
improve the level of service their customers experience.

. Develop brand positionings for specific customer segments. We conduct
research to understand the needs and preferences of our clients'
customers to determine the demand for the clients' products and
services. We then analyze and utilize this data to develop Internet-
based solutions that enable our

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clients to target their customers on an individualized, one-on-one
basis. We also create customer segmentation models to identify specific
customer branding strategies to be augmented through the use of the
Internet.

. Create the user experience on the Internet. We develop the content and
design the user interfaces for our clients' web sites. The content and
design of each web site delivers the clients' brand positioning to
consumers in a way that both complements other media while utilizing the
unique capabilities afforded by the Internet.

. Develop, install, and integrate Internet-based customer relationship
management systems. We provide the systems integration, architectural
design, and application development to create our clients' Internet-
based systems. These systems interface our clients' web sites with their
call centers, retail outlets, marketing partners, customer service, and
direct mail channels. These systems enable all communication channels to
share data and create intelligent interactions with customers regardless
of the media used for a particular communication.

. Create custom applications of our technology process, the Dynamic
Marketing Environment(TM) (DME(TM)). The DME(TM) allows our clients to
access multiple customer data streams, analyze that data and deploy
highly-customized content, including individualized offers and e-mail
messages, to our clients' customers in real time. These data include:

. client-provided marketing data including previous transactions and
promotional history;

. demographic data purchased from outside vendors;

. customer-provided data; and

. behavioral data captured from online click-stream activity.

. Plan and implement media strategies that generate traffic to our
clients' web sites. We evaluate, negotiate and implement online media,
promotions, events and strategic partnership opportunities to cost-
effectively channel the most qualified customer prospects to the
client's business. By evaluating customer response and business traffic
patterns, the communications mix is aggressively managed to achieve the
greatest return on the client's investment.

. Provide ongoing management, enhancement and optimization of e-commerce
enterprises. By gathering our clients' sales data from all relevant
channels of communication with its customers, we provide our clients
with access to continual, real-time information regarding the
performance of their web sites. We analyze this data to provide
continuous management, enhancement and optimization of our clients' e-
commerce applications, leading to steadily improving results for our
clients.

Growth Strategy

Circle.com's objective is to be the leading provider of Internet-based
customer relationship management systems for Fortune 1000 and emerging
Internet-based companies. In order to accomplish this objective, we will focus
on:

. Delivering measurable results. As a company with a strong direct
marketing heritage, we fundamentally believe that our success is closely
tied to that of our clients. The primary measure of our success is our
clients' return on investment. Therefore, we begin every engagement with
a thorough understanding of our clients' business objectives and
criteria for success. While we deliver a broad range of both front-end
and back-end services, we understand that we must deliver measurable
results that are in line with the goals of our clients in order to
continue to grow and retain business.

. Developing relationships with clients who have expanding service
needs. We have built our business by establishing large, retainer-based
relationships with clients for whom the Internet has critical strategic
importance. These clients include both Fortune 1000 clients and emerging
Internet-based companies. Our most dramatic growth has come from further
developing our existing

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customer relationships rather than by continually seeking smaller
projects from relatively more clients. We believe that this approach
provides us with a more stable and predictable foundation for growth.

. Maintaining the quality and breadth of our service offerings. Our core
competencies include all the front-end services and back-end systems
necessary to create profitable Internet-based customer relationship
management systems for our clients. Circle.com has focused on building
those core competencies to be the "best of the breed" in order to
deliver the best possible service offerings to its clients. We believe
our clients benefit from this approach due to the time and cost savings
of working with a single firm, the superior e-commerce systems made
possible by our talented professionals who have expertise in a broad
range of disciplines, and our integrated manner of developing these
systems. We are committed to maintaining and enhancing this client
service philosophy, which we believe is an important factor in retaining
and growing our client relationships.

. Continually enhancing our technological leadership. We have developed a
suite of technology products that form the basis for our clients'
solutions. We intend to maintain our technology leadership in software
products, including our Dynamic Marketing Environment(TM) (DME(TM)),
interactive campaign management, content management and templating
processes. The Gartner Group, a leading Internet research organization,
has recognized the DME(TM) as unique among Internet providers in
delivering enterprise-wide marketing systems. We intend to continue to
focus our research and development efforts on creating more capabilities
and adding more functionality to the DME(TM) process to maintain this
competitive advantage. To that end, we will focus our hiring on
technicians from leading industry and academic venues. We will also seek
partnerships with our more entrepreneurial clients to develop specific
new applications of the DME(TM) process that expand the scope and
increase the functionality of the system.

. Attracting and retaining highly skilled professionals. Hiring and
retaining highly skilled employees is one of our highest priorities. In
addition to hiring talented individuals from within the Internet
industry, we focus on hiring from a variety of other non-digital fields.
We see this strategy as a method of avoiding what we call "web echo,"
the tendency of some Internet organizations to think only within the
parameters of the Internet. By creating a diverse work force, we
continually provide fresh thinking and new approaches to our clients.

. Leveraging our relationship with Snyder Communications. We believe our
Snyder Communications heritage to be a strong competitive advantage. By
leveraging our relationship with Snyder Communications, we gain access
to many leading companies with which we are not currently doing
business. Additionally, we can co-market the capabilities of Snyder
Communications to our new clients, and create a broader service offering
that can be tailored to specific client needs and situations.

Client Case Studies

The following case studies are representative of the circle.com engagement
approach and outline the services that we have provided for four of our
clients:

IBM SMB (Small & Medium Business) Worldwide Virtual Relationship Management--
http://www.ibm.com/smallbusiness

Like many other Fortune 500 companies, IBM had been searching for a cost-
effective way to communicate and build relationships with the over 120 million
small businesses throughout the world. The more traditional direct marketing
channels, like direct mail and call centers, were unable to cost-effectively
deliver the necessary information about IBM's products and services to the
small business community. Circle.com was asked to assist IBM in developing a
solution. We identified the opportunity to use the Internet as IBM's primary
tool for communicating and building relationships with its target market.

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We implemented our processes, skill sets and the DME(TM) to build a platform
that allows IBM to identify, nurture and grow profitable relationships. We
established a dialogue with prospective customers to collect information which
was used to determine their needs. In addition, we also created a method to
enable IBM's in-house marketers to access IBM's creative asset library of
catalogues and products, customize the messages and pricing for the individual
prospects and then send them through e-mail and customized Internet-based HTML
pages. By customizing the communications and automating the decisions regarding
when to talk about what to whom, we continue to assist IBM in successfully
building customer relationships that result in measurable financial
transactions within this new market segment for IBM.

In North America and Europe, we have optimized this DME(TM) implementation to
span worldwide and service the needs of IBM's Small & Medium Business
customers. As a result of this new service, IBM is now realizing significant
incremental revenue from a segment with which they have never consistently done
business. The DME(TM) is the first interactive marketing system in place at IBM
that allows it to track the marketing effectiveness of all campaigns, messages,
partners and products right down to the transaction level.

Bell Atlantic Consumer Website--http://www. bellatlantic.com/foryourhome

We were challenged by Bell Atlantic to build an e-commerce capability that
integrated Bell Atlantic's residential customer care strategy with its web site
and set the stage for the company to conduct consumer transactions via the web.

After extensive research into the online shopping preferences of Bell
Atlantic's customers--conducted jointly by circle.com and Bell Atlantic--we
developed a consumer web site for Bell Atlantic with built-in convenience and
simplicity.

Although the web site contains more then 800 pages of information on the
company's product and service offerings, the information is presented in a
customer-friendly manner through a "control panel" interface that delivers
customized and state-specific product and service information, bill viewing and
complete e-commerce fulfillment. The web site also included the development of
a "loop qualification system," which allows consumers to determine whether Bell
Atlantic's Infospeed DSL service, its newly introduced broadband offering, is
available in their areas. In addition, we have played a significant role in
communications efforts across all media for Infoseek DSL.

The programs and systems we have developed and implemented have enabled Bell
Atlantic to introduce an Internet channel which creates awareness and fulfills
their communications requirements. This channel has proven successful in the
company's consumer sales programs for products such as Caller ID, home voice
mail and other services. Since the launch of the site, Bell Atlantic has seen a
marked increase in both the number of site visits and online customer
inquiries.

United Parcel Service--The Document Exchange --http://www.exchange.ups.com

A recent development project was for the re-launch of UPS's new electronic,
Internet-based courier service, The Document Exchange. This campaign was
critical for UPS, as it repositioned the company as a facilitator of e-commerce
by offering a method of delivering documents through the Internet that is as
efficient, secure and time definite as traditional methods of document
delivery.

We identified the opportunity to use the Internet as the main sales channel
for UPS's Document Exchange. UPS's goal was to build new in-depth customer
relationships on a global basis and to market this product to

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the ultimate end users, as opposed to shipping managers. We chose the Internet
as the primary vehicle for marketing the new product not only because it is an
Internet-based product, but also because UPS did not have the internal sales
force expertise to apply the appropriate "feet on the street."

Our team of strategic, creative design and technologically-skilled
professionals began the implementation phase of the project by determining, in
conjunction with UPS, the demand for this new service. In addition, we also
developed the brand positioning and a way to identify companies and individuals
that would be potential users of the service. From this information, we created
the look of the new online service and the ultimate end-user experience. Our
goal was to ensure an intuitive experience, quick adoption of the service and
high satisfaction among users. We also designed the product to use the Internet
itself as an automated sales force. Lastly, we developed and implemented an
integrated marketing plan that included both Internet-based and offline
marketing tactics.

As a result, we have optimized UPS' ability to acquire, conduct business with
and retain customers using an Internet-based customer relationship management
system. This interactive system serves as a virtual sales force and produces
highly targeted interactive media messages and very aggressive offers by
utilizing automated campaign messaging and dynamically serving content based on
who is visiting the site and from where. UPS is also able to download relevant
information into its back-end billing system. In effect, the Internet has
become the primary vehicle for UPS to communicate with its Document Exchange
customers by duplicating a traditional sales force with an integrated marketing
server.

ServiceMaster--The Virtual Home Manager --http://www.servicemaster.com

ServiceMaster is a leader in facilities and residential services, with its
TruGreen/Chem Lawn, Terminix, American Home Shield, Merry Maids, Furniture
Medic, AmeriSpec, Rescue Rooter and ServiceMaster brands. We identified the
opportunity for ServiceMaster to utilize Internet protocols to enhance the
company's existing communications and transaction capabilities by leveraging
customer information to increase retention, customer service and cross-selling
opportunities among its various service lines.

We implemented our strategic, creative and technical capabilities to
transform the way ServiceMaster services its current customer base through an
online customer support service. We call this enterprise marketing and sales
system the "Virtual Home Manager." Using this system, ServiceMaster is able to
gain invaluable knowledge regarding its customers and their interests. It
establishes a direct connection with ServiceMaster's diverse customer base and
capitalizes on the opportunity to cross market its service offering by:

. actively managing customer service and emergency requests;

. creating a resource and performance management tool;

. developing a knowledge respository from which to understand specific
customer usage and brand interactions;

. developing a self-enclosed customer service representative training
resource;

.creating a unified brand support/service experience; and

. creating an extensible data structure that will act as a data funnel for
cross channel customer touches.

As part of the optimization phase of the project, we designed Internet access
points to enable customers and prospects to identify local provider services.

Future efforts to build upon this scalable system will allow ServiceMaster
to:

. identify, qualify and service Internet-based leads through the "Virtual
Home Manager" system;

. create real-time marketing programs, both online and offline, that will
dynamically address specific customer needs;

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. enable Internet access to customer analytics through linkages with a
data warehouse of transactional information; and

. create a real-time research and analysis tool to profile and modify
segment messaging to optimize campaign response.

System Architecture and Design of the DME(TM)

We have combined our direct marketing expertise with our world class
technology skills to develop a proprietary technology process which we call the
Dynamic Marketing Environment(TM). The DME(TM) is a flexible, configurable
combination of systems architectures, applications and processes that uses the
latest technologies to support the client relationship management systems we
develop for our clients. We believe this proprietary process provides a unique
and powerful interactive marketing and sales communications tool for our
clients. The core function of the DME(TM) is to deliver the right information
or message to the right person at the right time.

At the heart of the DME(TM) process is an enterprise rule engine which
governs and automates many of the marketing and sales tasks associated with our
clients' e-commerce activities. We develop a rule engine for each customer once
we have defined, and then aggregated, all inputs and outputs generated from our
client's web site and surrounding marketing activities. Once developed, the
rule engine is capable of determining the appropriate content to be posted on
the web site based on the information we know or do not know about a visitor
and the appropriate delivery times for a variety of communications activities.
The DME's ability to map the appropriate content in real-time offers a
tremendous advantage in the number of permutations and versions that a web site
can represent. By incorporating the use of real-time changes to the look and
feel of the Internet site, we are no longer concerning ourselves with the
delivery of a certain page, but with the delivery of a specific version of a
specific page targeted to a specific customer.

The DME(TM) performs the following functions:

. captures and processes relevant data from both traditional and online
communications and data sources;

. archives, builds, edits and deploys individualized end-user content and
communications across multiple marketing channels;

. monitors and provides feedback on the effectiveness of our clients' e-
commerce activities; and

. provides leads to the appropriate internal and external constituencies
of a client's organization.

As a result, the DME enables our clients to:

. build their knowledge of the end-user's interests;

. enhance what the user has already experienced;

. infer, in the aggregate, how the web site, or number of sites as a
whole, is performing through the use of real-time data mining and
continuous improvement methodologies and then publish this analysis on
the client's intranet; and

. aggressively test a number of offers and promotions with the ability to
validate the right offer and price point by target.

We design the DME(TM) with a commitment to the following principles to
enhance its long-term feasibility:

. Openness--The DME is designed to be flexible and responsive in the face
of changing business requirements and user needs. To accomplish this, we
use open technologies including messaging, object-oriented design, an
Internet-based Java, a cross platform development environment and a
database independent design.

. Maintainability--We impose strict standards for modularity, data
abstraction and code documentation to insure the DME is more robust in
the face of changing requirements.

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. Configurablity--The DME is designed to be configured to meet the unique
needs of our various clients, both at the time of installation and on an
on-going basis. We accomplish this through the extensive use of database
reference tables, environment configuration tables and system
compilation variables.

. Scaleability--We incorporate a three-tier client-server model to enable
the DME to be easily scaled by adding additional data servers, object
servers, and application servers.

We believe the DME enables our clients to create customer relationship
management systems which enhance their ability to attract and retain profitable
customers using the latest Internet-based technologies.

Personnel and Culture

As of March 31, 1999, we employed approximately 200 persons worldwide.

We recognize that our employees and culture are fundamental to the value we
offer to our clients. We believe in attracting and hiring the most talented
individuals in the industry, providing them with the necessary training and
tools and then allowing them the room they need to thrive. In order to
encourage our employees to develop their own best approaches to accomplish our
clients' objectives, we strive to keep institutional obstacles to creative
thinking to a minimum and reward new ways of thinking. We believe that by
fostering an entrepreneurial spirit we are better able to attract talented and
motivated professionals, create innovative solutions and provide the
opportunity for each individual employee to succeed.

We concentrate on recruiting and retaining people with a diverse set of
skills and project management experience. We have a structured recruiting
program designed to attract experienced professionals from within the Internet
industry as well as from a variety of other, non-digital disciplines. We
dedicate significant resources to the training and retention of our employees.
We realize that the demand for qualified personnel in our industry
substantially exceeds the supply. In response to this, we have created a
rigorous training process that utilizes both internal and external resources to
develop our highly qualified individuals. Our training programs include
seminars and other learning opportunities through our technology partners as
well as an internal mentoring program called the Developer Apprentice Program
that is designed to bring new employees quickly into the circle.com culture. We
believe that our commitment to these training programs, in addition to morale
building activities such as inter-office sports teams, make circle.com an
exciting and rewarding place to work and enable us to retain our exceptionally
skilled professionals.

Innovation and technological leadership are key components to our success. In
addition to hiring, training and retaining qualified personnel, circle.com
makes significant investments in the research and development of new
technologies. We believe that these investments not only allow us to retain our
competitive advantage in creating profitable customer relationship management
systems for our clients, but also serve to create a challenging and satisfying
work environment for our employees.

None of our employees are represented by a labor union, nor have we ever
experienced a work stoppage. We believe that our employee relations are good.

Intellectual Property Rights

We have developed detailed tools, processes and methodologies, including our
Dynamic Marketing Environment(TM). We have also developed software code,
scripts, libraries and other technology used internally and in client
engagements. We seek to protect our intellectual property through a combination
of copyrights, trademarks and trade secret laws. We enter into confidentiality
agreements with our employees and clients. We cannot guarantee that the steps
we have taken to protect our intellectual property rights will be adequate to
deter misappropriation of our proprietary information. For example, we may not
detect unauthorized use of our intellectual property. In addition, the legal
status of intellectual property on the Internet is currently subject to various
uncertainties. See "Risk Factors Relating to circle.com--Misappropriation of
our trademarks and other proprietary rights could harm our reputation, affect
our competitive position and cost us money."

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Competition

Our business incorporates the successful integration of strategy consulting,
creative design and systems engineering skills to leverage the direct marketing
capabilities of the Internet and to both acquire and service customers. While
we have competitors who compete with us in each of these areas, we believe we
are uniquely qualified to provide a structured approach to designing a fully
integrated Internet solution.

The marketplace for our services is characterized by increasing competition
and the rapid adoption of new technologies. We face competition from a wide
range of traditional players including:

. Internet professional services providers (USWeb/CKS, Viant Corporation,
Scient Corporation, Razorfish, Proxicom and iXL Enterprises, Inc.;
Agency.com and Modem Media.Poppe Tyson, Inc.);

. on-line direct marketing firms (MyPoints.com and Net Perceptions);

. technology integrators (International Business Machines Corporation,
Andersen Consulting, Computer Sciences Corporation, Cambridge Technology
Partners, Inc., and Sapient Corporation); and

. strategic consulting firms (McKinsey & Company, Inc. and Boston
Consulting Group, Inc.).

Many of these competitors have considerably more financial resources, longer
operating histories, longer, more established client relationships, greater
marketing wherewithal and stronger brand name recognition than circle.com. On a
more limited basis, circle.com also competes with the internal marketing,
design, strategic planning and information technology groups within its
clients' organizations.

The Internet professional services market has limited barriers to entry and
new competitors frequently enter the market. We expect to face competition from
new market entrants and that the future consolidation in the Internet
professional services market will create larger, more viable competitors. We
believe that we have established a record of success through our integrated
approach to developing and implementing Internet business solutions with
measurable results.

We believe that the competitive success factors in the Internet professional
services market are:

. the ability to attract and retain professionals;

. technological innovation and implementation expertise;

. strategic vision;

. the breadth and quality of services provided;

. pricing; and

. track record of delivering measurable client results.

We believe that we are able to compete favorably in all of these areas. We
believe that we are able to attract talent as we offer professionals an
opportunity to join an entrepreneurial organization with a successful track
record and strong growth potential. We believe we have the marketing, strategy
and technical skills to provide truly integrated Internet solutions. With our
heritage in customer relationship management, we believe we are uniquely
positioned to develop e-commerce models that are effective and produce
measurable results.

U.S. and Foreign Government Regulation

Congress has recently passed legislation that regulates various aspects of
the Internet, including:

. on-line content;

. copyright infringement;

. user privacy;

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. taxation;

. access charges; and

. liability for third-party activities.

In addition, federal, state, local and foreign governmental organizations
also are considering, and may consider in the future, other legislative and
regulatory proposals that would impact transactions on the Internet. Areas of
potential regulation include:

. access charges;

. export control;

. customs/duties;

. domain names and trademark infringement;

. electronic contracting/signatures;

. libel;

. pricing;

. quality of products and services;

. intellectual property ownership; and

. jurisdiction.

The European Union has adopted directives relating to the processing and
protection of personal data and distance selling. These directives are now in
the process of being implemented into the European Union's Member States'
domestic laws. The directive on personal data is particularly important, as it
restricts the processing of private data through the Internet and also appears
set to restrict the flow of such data between the U.S. and Europe.

Other directives, which are still at a proposal stage but are likely to be
adopted in the near future, will further harmonize the currently very
fragmented legislation of European Union Member States on:

. e-commerce, including liability issues;

. electronic signatures;

. specific rules governing the distance selling of financial services; and

. copyright protection of materials that are accessible online.

It is not known how courts will interpret both existing laws and new laws.
Therefore, we are not sure how new laws or the application of existing laws
will affect our business. In addition, our business may be indirectly affected
by our clients who may be subject to similar legislation. Increased regulation
of the Internet may decrease the growth in the use of the Internet, which could
decrease the demand for our services, increase our cost of doing business or
otherwise have a material adverse effect on our business, financial condition
and results of operations.

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Management

The senior managers of circle.com consist of the following individuals:

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Robert T. Wilke....... 43 Chief Executive Officer
Eric J. Snyder........ 41 President
Charles Tarzian....... 42 Chief Technology Officer
Victor E. Mandel...... 34 Senior Vice President--Finance and Development
</TABLE>

Robert T. Wilke serves as Chief Executive Officer of circle.com. Mr. Wilke
served in a variety of roles at a Snyder Communications' subsidiary since 1983,
including Executive Vice President and General Manager of its Baltimore office
from 1989 to 1999. Prior to joining Snyder Communications, Mr. Wilke held
marketing positions in the publishing industry in New York.

Eric J. Snyder serves as President and Chief Operating Officer of circle.com.
In April 1997, Mr. Snyder co-founded Circle Interactive, LLC. Mr. Snyder served
as President of Circle Interactive until its acquisition by Snyder
Communications in May 1998. Prior to forming Circle Interactive, Mr. Snyder was
Director of Media and Interactive Services at Pagano, Schenck and Kay
Advertising in Boston from July 1994 through April 1996. Prior to that, he was
Senior Vice President at the J. Walter Advertising Agency. Mr. Snyder has no
relation to Daniel or Michele Snyder.

Charles Tarzian serves as Chief Technology Officer of circle.com. Mr. Tarzian
is responsible for conceptualization, definition and delivery of all aspects of
circle.com's e-systems. Mr. Tarzian served as President of a division of Snyder
Communications since June 1995. Mr. Tarzian designed and developed circle.com's
Dynamic Marketing Environment(TM), which is discussed under "Circle.com--
Business --Services." Prior to joining Snyder Communications, Mr. Tarzian was
President and founder of Coyote Technologies, Inc., a New York City-based
developer of enterprise systems software since 1987.

Victor E. Mandel joined circle.com as Senior Vice President--Finance in May
1999. Prior to joining circle.com, Mr. Mandel, who joined Goldman Sachs & Co.
in 1991, was a Vice President in the Investment Research department at Goldman
Sachs & Co. following the Internet and direct marketing industries.

Properties

Our corporate headquarters are located in Baltimore, Maryland in leased
facilities. We also lease facilities in:

<TABLE>
<CAPTION>
<S> <C>
. San Francisco, California . Boston and Cambridge, Massachusetts
. Denver, Colorado . McClean, Virginia
. Wilton, Connecticut . Bristol, England
. Bethesda, Maryland
</TABLE>

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PROPOSAL 2--ADOPTION OF AMENDED AND
RESTATED STOCK INCENTIVE PLAN

Background and Reasons for the Proposal

Proposal 2 pertains to adoption of our amended and restated stock incentive
plan.

On June 22, 1999, our board of directors adopted the amended and restated
stock incentive plan. The amended stock incentive plan permits the board of
directors to issue both SNC stock and circle.com stock under the plan. The
terms of the amended and restated stock incentive plan are the same in all
material respects as our existing stock incentive plan except (1) both classes
of Snyder Communications' common stock may be issued under the amended plan and
(2) the total number of shares available for issuance under the amended plan
has been increased.

If approved by the stockholders, the amended stock incentive plan will become
effective upon the recapitalization. We believe the amended stock incentive
plan will promote the interests of Snyder Communications, each group and our
stockholders by helping to attract and retain exceptional employees, officers,
directors and consultants. The amended stock incentive plan will motivate
participants by means of stock options, stock appreciation rights and
restricted shares to achieve long-term performance goals, and enable our
employees, officers, directors and consultants to participate in our long-term
growth and financial success.

The number of shares of SNC stock and circle.com stock available for issuance
under the amended stock incentive plan has been determined in light of the
adjustments required to be made to the number of shares and exercise price of
options currently outstanding. These adjustments are necessary in order to
provide that, following the recapitalization, options held by participants
employed in the circle.com business will be exercisable only for shares of
circle.com stock and options held by participants employed in the SNC business
will be exercisable only for shares of SNC stock. In order to provide that
outstanding options held by participants employed in a group are exercisable
only for shares of that group's common stock, and to maintain the economic
position of the option holders, we will adjust the exercise price and the
number and type of shares issuable upon exercise of the outstanding options.
Because of the reduction in the intrinsic value of outstanding options as a
result of the intended spin-off of our healthcare services business and the
creation of two classes of common stock, there are not be enough shares
available for issuance under the existing stock incentive plan for us to make
the required adjustments. Accordingly, it was necessary to increase the number
of shares available for issuance under the amended plan. See "--Summary of the
Stock Incentive Plan--Adjustments of Existing Stock Option Awards."

To understand the amended and restated stock incentive plan more fully, you
should read the plan which is attached to this proxy statement and prospectus
as Annex B.

Our board of directors believes that this proposal is an integral part of the
recapitalization. Accordingly, approval of this proposal and the similar
proposal relating to the stock purchase plan is a condition to the
recapitalization proposal.

Summary of the Stock Incentive Plan

Shares Subject to the Stock Incentive Plan

Subject to adjustment as discussed below, we will make available shares
of SNC stock and shares of circle.com stock for issuance under the stock
incentive plan.

Types of Awards under the Stock Incentive Plan

Awards granted under the stock incentive plan may be in any combination of
the following:

. incentive stock options;

. non-qualified stock options;

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. stock appreciation rights; and

. restricted stock.

Eligibility

Under the terms of the stock incentive plan,

. directors,

. officers,

. key employees and

. consultants

of Snyder Communications and its subsidiaries designated by the board
committee administering the stock plan are eligible to participate in the
plan. As of June 22, 1999, there were approximately 9,400 persons eligible to
participate in the plan.

Limitation on Awards to Any Individual

Under the amended stock incentive plan, the maximum number of shares of
common stock with respect to which options or other awards may be granted to
any individual in any calendar year may not exceed one million shares of SNC
stock and one million shares of circle.com stock.

Administration

Generally, a committee appointed by the board will administer the stock
incentive plan. If the board of directors does not appoint a committee to
administer the stock incentive plan, the full board will act as the
administering committee. In some cases, however, others will administer the
stock incentive plan:

. the board's compensation committee will administer the plan with respect
to all of our eligible employees or eligible employees of our
subsidiaries at or above the rank of Senior Vice President.

. the board of directors will administer the plan with respect to all non-
employee directors and non-employee consultants.

Stock Options

Exercise Price. The purchase price of a share of SNC stock or circle.com
stock covered by an option may not be less than 100% of the fair market value
of a share of that class of common stock on the date of grant. However, in the
case of an incentive option granted to a person who beneficially owns 10% of
the total combined voting power of all classes of stock, the purchase price
may not be less than 110% of the fair market value of a share of that class of
common stock on the date of grant.

Option Vesting and Exercising. The committee administering the plan will
determine the vesting period and all other terms and conditions of each
option, except that no option may be exercisable more than ten years (five
years in the case of incentive options granted to a 10% owner) from the date
of its grant. The administering committee may, in its discretion, accelerate
the vesting of any option.

An option may only be exercised to the extent that it is vested. Generally,
options will not vest during the first six months after being granted.
Participants may exercise options by delivering cash, SNC stock, circle.com
stock or any combination thereof.

The aggregate fair market value of SNC stock and circle.com stock underlying
incentive stock options held by a participant that may become exercisable for
the first time during any calendar year may not exceed $100,000.

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Termination of Employment. The administering committee will determine when,
if at all, an option will vest when a participant in the plan leaves Snyder
Communications. Generally, if a participant's employment or service is
terminated other than by death or disability, (1) his or her non-qualified
options will cease to vest immediately and the options will terminate three
months after termination of employment or service and (2) his or her incentive
options will terminate three months after termination of employment or service.
If a participant dies or becomes disabled, his or her options will terminate
after one year. In no event may an option terminate later than ten years after
granted (five years in the case of incentive options granted to a 10% owner).

Grants to Executive Officers and Employees as a Group. As of the date of this
proxy statement,

. Daniel M. Snyder, our chief executive officer, held options to
purchase one million shares of our existing common stock. Following
the recapitalization, these options will be exercisable for
shares of SNC stock and shares of circle.com stock.
. Michele D. Snyder, our vice chairman, president and chief operating
officer, held options to purchase 500,000 shares of our existing
common stock. Following the recapitalization, these options will be
exercisable for shares of SNC stock and shares of
circle.com stock.

. A. Clayton Perfall, our chief financial officer, held options to
purchase 460,000 shares of our existing common stock. Following the
recapitalization, these options will be exercisable for shares
of SNC stock and shares of circle.com stock.

. all of our employees as a group, other than Mr. Snyder, Ms. Snyder
and Mr. Perfall, held options to purchase an aggregate of 12,177,536
shares of our existing common stock. Following the recapitalization,
these options will be exercisable for an aggregate of shares of
SNC stock and shares of circle.com stock.

Stock Appreciation Rights

Stock appreciation rights may only be granted in conjunction with options
granted under the plan, either at the time of the option grant or at any time
after the option grant.

Stock appreciation rights may not be exercised by a participant who is a
director or officer (as defined under the securities laws) within six months
after being granted, except in the case of the death or disability of the
participant. Stock appreciation rights are exercisable only when the related
option is exercisable. Stock appreciation rights and the related option may be
exercised at the same time only when the related option is a non-qualified
option.

Upon exercise of a stock appreciation right, the participant will be entitled
to the difference between

. the fair market value of a share of the class of common stock
underlying the related option and

. the per share exercise price of the related option,

multiplied by the number of shares represented by the stock appreciation right.
The committee administering the stock incentive plan will determine the form of
payment, which may be in cash, either class of common stock or any combination
of cash and stock.

A stock appreciation right may be exercised without exercising the related
option, but the related option will be cancelled to the extent the right is
exercised. Similarly, a related option may be exercised without exercising the
stock appreciation right, but the stock appreciation right will be cancelled to
the extent the option is exercised.

In addition to the terms and conditions mentioned above, stock appreciation
rights issued in connection with incentive stock options:

. must expire not later than the expiration of the related option;

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<PAGE>

. will be transferable only when the related option is transferable and
under the same conditions; and

. may be exercised only when the fair market value of the class of common
stock subject to the related option exceeds the exercise price of the
related option.

Restricted Stock

The committee may make restricted stock awards in SNC stock and circle.com
stock. The committee will determine:

. the class of stock subject to the restricted stock award;

. the terms and conditions of the restricted stock award;

. the restricted period for the award;

. the restrictions applicable to the award, which may include continued
employment and specific corporate, divisional or individual performance
standards or goals;

. whether the participant will receive dividends and other distributions
on the restricted stock during the restricted period or whether they
will be withheld until the restrictions have been satisfied;

. whether the award will vest in the event of the participant's death or
disability prior to expiration of the restrictions; and

. whether to waive any or all of the restrictions.

Upon an award of restricted stock, a participant will be a stockholder with
respect to those shares of restricted stock and will be entitled to vote those
shares. The stock certificate representing the restricted stock will be held by
Snyder Communications, together with stock powers executed by the participant
in favor of Snyder Communications, until the restricted period expires and any
restrictions imposed are satisfied.

Amendment of the Stock Incentive Plan and Options

The board of directors may amend the stock incentive plan from time to time,
except that stockholder approval is needed to:

. change the number of shares of SNC stock or circle.com stock subject to
the plan or that may be granted to any individual in any calendar year;

. change the class of eligible participants;

. decrease the price at which incentive options may be granted; or

. remove the administration of the stock incentive plan from the committee
administering the plan.

The board of directors and the applicable participant may agree to amend or
modify the terms and conditions of a particular award.

Non-Transferability of Options

Except as provided by the board of directors or the committee administering
the stock plan, awards may (1) not be transferred by a participant during the
participant's lifetime, (2) not be assigned or otherwise disposed of except
pursuant to a domestic relations order, by will or by applicable laws of
descent and distribution or (3) only be exercised during the participant's
lifetime by the participant or the participant's guardian or legal
representative.

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Corporate Changes

The stock incentive plan provides that the administering committee may
adjust, as it deems appropriate, the maximum number of shares that may be
subject to options or awards, and the terms of any outstanding options or
awards under the stock incentive plan, to reflect changes in outstanding stock
that occur because of stock dividends, stock splits, recapitalizations,
reorganizations, liquidations or other similar events.

If we merge or consolidate with another corporation, liquidate or dispose of
all or substantially all of our assets while there are unexercised options
outstanding:

. after the effective date of the merger, consolidation, liquidation or
disposition, as the case may be, each holder of an option will be
entitled, upon exercise of the option, to receive, in place of the
applicable class of common stock, the number and class or classes of
stock or other securities or property to which the holder would have
been entitled if the holder had held the stock underlying the option
directly immediately prior to the event in question; or

. if the options have not already become exercisable, the committee may
waive any conditions so that the options will be exercisable in full.

Adjustments of Existing Stock Option Awards

If the recapitalization proposal is approved and implemented, outstanding
stock options previously granted under the stock plan based upon shares of
existing common stock will be adjusted so that outstanding stock options
awarded to holders employed in the circle.com business will be exercisable only
for shares of circle.com stock, outstanding stock options awarded to holders
employed in the SNC business will be exercisable only for shares of SNC stock
and outstanding options held by directors and certain corporate level officers
and employees will be exercisable for both SNC stock and circle.com stock.
Accordingly, in order to maintain the economic position of the option holders
in the recapitalization, the exercise price and number of shares of circle.com
stock and/or SNC stock, as applicable, issuable upon exercise of the options
will be adjusted so that the aggregate intrinsic value and the ratio of the
exercise price per option to the market value per share of the outstanding
options will not change.

Future Issuances Pursuant to Stock Incentive Plan

Following implementation of the recapitalization proposal, the administering
committee may, in its discretion, grant awards with respect to SNC stock,
circle.com stock, or both, in such amounts and types as it determines in
accordance with the terms of the stock incentive plan.

In determining whether awards in respect of SNC stock, circle.com stock, or
both, are to be made to specific employees, it is anticipated that the
committee will consider, among other things, the identity of the group to which
the employee in question provides services. In addition, because of the
complementary nature of the businesses of SNC and circle.com, it is anticipated
that services performed in respect of one group would have at least an indirect
effect upon the business of the other group. Accordingly, it is anticipated
that the committee could decide that in order to provide the maximum incentive
to employees regarding the overall success of Snyder Communications, it may be
appropriate to grant awards consisting of shares of both classes of common
stock to employees performing services for one group. If the committee elects
to grant awards to individual employees with respect to both SNC stock and
circle.com stock, the allocation of such awards between the two classes of
common stock will be at the committee's discretion. To the extent awards based
upon one class of common stock are granted to employees of the group relating
to the other class of common stock, the issuance of shares of such class of
common stock upon exercise of such awards will not be treated as an inter-group
interest and will dilute the holders of the other class of common stock.

In connection with the allocation of expenses related to and proceeds
received upon the exercise of options awarded under the stock plan, such
expenses and proceeds will be attributed to SNC, in the case of options to
purchase SNC stock, and to circle.com, in the case of options to purchase
circle.com stock.

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Certain Federal Income Tax Consequences

The statements in the following paragraphs of the principal federal income
tax consequences of awards under the amended stock incentive plan are based on
statutory authority and judicial and administrative interpretations, as of the
date of this proxy statement, which are subject to change at any time (possibly
with retroactive effect). The law is technical and complex, and the discussion
below represents only a general summary.

Incentive Stock Options. Incentive stock options ("ISOs") granted under the
amended stock incentive plan are intended to meet the definitional requirements
of Section 422(b) of the Code for "incentive stock options."

An employee who receives an ISO does not recognize any taxable income upon
the grant of the ISO. Similarly, the exercise of an ISO generally does not give
rise to federal income tax to the employee, provided that (1) the federal
"alternative minimum tax," which depends on the employee's particular tax
situation, does not apply and (2) the employee is employed by Snyder
Communications or a subsidiary corporation (within the meaning of Section
424(f) of the Code) of Snyder Communications from the date of grant of the
option until three months prior to its exercise, except where the employment
terminates by reason of disability (where the three month period is extended to
one year) or death (where this requirement does not apply). If an employee
exercises an ISO after these requisite periods, the ISO will be treated as an
NSO (as we define it below) and will be subject to the rules set forth below
under the caption "Non-Qualified Stock Options and Stock Appreciation Rights."

If after exercising an ISO, an employee disposes of the SNC stock or
circle.com stock acquired under the ISO more than two years from the date of
grant and more than one year from the date of transfer of the SNC stock or
circle.com stock pursuant to the exercise of the ISO (the "applicable holding
period"), the employee will generally recognize a long-term capital gain or
loss equal to the difference, if any, between the amount received for the
shares and the exercise price. If, however, an employee does not hold the
shares for the applicable holding period--thereby making a "disqualifying
disposition"--the employee would recognize ordinary income equal to the excess
of the fair market value of the shares at the time the ISO was exercised over
the exercise price and the balance, if any, would be long-term capital gain
(provided the holding period for the shares exceeded one year and the employee
held the shares as a capital asset at the time of disposition). If the
disqualifying disposition is a sale or exchange that would permit a loss to be
recognized under the Code (were a loss in fact to be realized), and the sale
proceeds are less than the fair market value of the shares on the date of
exercise, the employee's ordinary income therefrom would be limited to the gain
(if any) realized on the sale.

An employee who exercises an ISO by delivering SNC stock or circle.com stock
previously acquired pursuant to the exercise of another ISO is treated as
making a "disqualifying disposition" of the SNC stock or circle.com stock if
the shares are delivered before the expiration of their applicable holding
period. Upon the exercise of an ISO with previously acquired shares as to which
no disqualifying disposition occurs, despite some uncertainty, it appears that
the employee would not recognize gain or loss with respect to the previously
acquired shares.

Snyder Communications will not be allowed a federal income tax deduction upon
the grant or exercise of an ISO or the disposition, after the applicable
holding period, of the SNC stock or circle.com stock acquired upon exercise of
an ISO. In the event of a disqualifying disposition, Snyder Communications
generally will be entitled to a deduction in an amount equal to the ordinary
income included by the employee, provided that the amount constitutes an
ordinary and necessary business expense to Snyder Communications and is
reasonable and the limitations of Sections 280G and 162(m) of the Code (which
we discuss below) do not apply.

Non-Qualified Stock Options and Stock Appreciation Rights. Non-qualified
stock options ("NSOs") granted under the amended stock incentive plan are
options that do not qualify as ISOs. An individual who receives an NSO or a
stock appreciation right will not recognize any taxable income upon the grant
of an NSO

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or right. However, the individual generally will recognize ordinary income upon
exercise of an NSO in an amount equal to the excess of the fair market value of
the shares of SNC stock or circle.com stock at the time of exercise over the
exercise price. Similarly, upon the receipt of cash or shares pursuant to the
exercise of a right, the individual generally will recognize ordinary income in
an amount equal to the sum of the cash and the fair market value of the share
received.

As a result of Section 16(b) of the Exchange Act, the timing of income
recognition may be deferred (generally for up to six months) for any individual
who is an officer or director of Snyder Communications or a beneficial owner of
more than ten percent (10%) of any class of equity securities of Snyder
Communications. Absent a Section 83(b) election (as we describe below it under
"Other Awards"), recognition of income by the individual will be deferred until
the expiration of the deferral period, if any.

The ordinary income recognized with respect to the receipt of shares or cash
upon exercise of an NSO or a right will be subject to both wage withholding and
other employment taxes. In addition to the customary methods of satisfying the
withholding tax liabilities that arise upon the exercise of an SAR for shares
or upon the exercise of an NSO, Snyder Communications may satisfy the liability
in whole or in part by withholding shares of SNC stock or circle.com stock from
those that otherwise would be issuable to the individual or by the individual
tendering other shares owned by him or her, valued at their fair market value
as of the date that the tax withholding obligation arises.

A federal income tax deduction generally will be allowed to Snyder
Communications in an amount equal to the ordinary income included by the
individual with respect to his or her NSO or right, provided that such amount
constitutes an ordinary and necessary business expense to Snyder Communications
and is reasonable and the limitations of Sections 280G and 162(m) of the Code
do not apply.

If an individual exercises an NSO by delivering shares of SNC stock or
circle.com stock, other than shares previously acquired pursuant to the
exercise of an ISO which is treated as a "disqualifying disposition" as
described above, the individual will not recognize gain or loss with respect to
the exchange of such shares, even if their then fair market value is different
from the individual's tax basis. The individual, however, will be taxed as
described above with respect to the exercise of the NSO as if he or she paid
the exercise price in cash, and Snyder Communications likewise generally will
be entitled to an equivalent tax deduction.

Other Awards. With respect to other awards under the amended stock incentive
plan that are either transferable or not subject to a substantial risk of
forfeiture (as defined in the Code and the regulations), individuals generally
will recognize ordinary income equal to the amount of cash or the fair market
value of the SNC stock or circle.com stock received.

With respect to awards under the amended stock incentive plan that are
settled in shares of SNC stock or circle.com stock that are restricted as to
transferability and subject to a substantial risk of forfeiture--absent a
written election pursuant to Section 83(b) of the Code filed with the Internal
Revenue Service within 30 days after the date of transfer of such shares
pursuant to the award (a "Section 83(b) election")--an individual will
recognize ordinary income at the earlier of the time at which (1) the shares
become transferable or (2) the restrictions that impose a substantial risk of
forfeiture of the shares lapse, in an amount equal to the excess of the fair
market value (on such date) of such shares over the price paid for the award,
if any.

The ordinary income recognized with respect to the receipt of cash, shares of
SNC stock or circle.com stock or other property under the amended stock
incentive plan will be subject to both wage withholding and other employment
taxes.

Snyder Communications will be allowed a deduction for federal income tax
purposes in an amount equal to the ordinary income recognized by the
individual, provided that such amount constitutes an ordinary and necessary
business expense to Snyder Communications and is reasonable and the limitations
of Sections 280G and 162(m) of the Code do not apply.

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Dividends and Dividend Equivalents. To the extent awards under the amended
stock incentive plan earn dividends or dividend equivalents, whether paid
currently or credited to an account established under the amended stock
incentive plan, an individual generally will recognize ordinary income with
respect to the dividends or dividend equivalents.

Change in Control. In general, if the total amount of payments to an
individual that are contingent upon a "change of control" of Snyder
Communications (as defined in Section 280G of the Code), including payments
under the amended stock incentive plan that vest upon a "change in control,"
equals or exceeds three times the individual's "base amount" (generally, the
individual's average annual compensation for the five calendar years preceding
the change in control), then, the payments may be treated as "parachute
payments" under the Code, in which case a portion of such payments would be
non-deductible to Snyder Communications and the individual would be subject to
a 20% excise tax on that portion of the payments.

Recommendation of the Board of Directors

Our board of directors has unanimously approved the amended and restated
stock incentive plan and believes its adoption to be in our best interests and
the best interests of our stockholders. Accordingly, our board of directors
unanimously recommends that you vote "for" the proposal.

Proposal 2 is conditioned upon approval by stockholders of the
recapitalization proposal and the stock purchase plan proposal. If either
proposal is not approved by stockholders and implemented by the board, Proposal
2 will not be implemented.

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<PAGE>

PROPOSAL 3--ADOPTION OF AMENDED AND
RESTATED STOCK PURCHASE PLAN

Background and Reasons for the Proposal

Proposal 3 pertains to adoption of our amended and restated stock purchase
plan.

On June 22, 1999, our board of directors adopted the amended and restated
stock purchase plan. The amended plan is designed to permit our employees to
purchase both SNC stock and circle.com stock at a discount under the stock
purchase plan. The terms of the amended plan are the same in all material
respects as our existing stock purchase plan except that both classes of common
stock may be purchased under the amended plan.

If approved by the stockholders, the amended stock purchase plan will become
effective upon the recapitalization. We believe the amended stock purchase plan
will promote the interests of Snyder Communications, each group and our
stockholders by encouraging employee participation in the ownership of Snyder
Communications. To understand the amended stock plan more fully, you should
read the plan, which is attached to this proxy statement and prospectus as
Annex C.

Our board of directors believes that this proposal is an integral part of the
recapitalization. Accordingly, approval of this proposal and the similar
proposal relating to the stock incentive plan is a condition to the
recapitalization proposal.

Summary of the Stock Purchase Plan

General

The amended stock purchase plan gives eligible employees of Snyder
Communications and its subsidiaries the opportunity to purchase shares of SNC
stock and shares of circle.com stock at a discount through payroll deductions.
This encourages employee participation in the ownership of Snyder
Communications. Employees must, except in the case of death or disability, hold
SNC stock and circle.com stock purchased under the amended stock purchase plan
for at least three months. Our board of directors believes that it is in the
best interests of Snyder Communications to promote employee participation in
the ownership of our company and considers the amended stock purchase plan to
be an attractive and convenient method by which this goal may be achieved.

Administration

The administrative committee of the board of directors will administer the
amended stock purchase plan. The administrative committee's interpretations and
decisions with respect to the plan, how the plan is operated and the rights of
individuals participating in the plan will be final and conclusive.

Eligibility

Participation in the amended stock purchase plan is voluntary and open to all
active employees of Snyder Communications who customarily works more than 20
hours a week for Snyder Communications or any of its subsidiaries. However, an
employee will not be eligible for the grant of any rights under the plan if the
employee would own, directly or indirectly, stock possessing 5% or more of the
total combined voting power of all classes of stock of Snyder Communications or
a parent or subsidiary of Snyder Communications. This includes any stock that
the employee may purchase under all outstanding rights and options. Also, an
employee will not be granted rights that would permit him or her to buy more
than $25,000 worth of stock under all employee stock purchase plans of Snyder
Communications in any calendar year. For this purpose, the value of stock is
based on the fair market value of the shares at the time the rights are
granted.

An employee on an approved leave of absence will generally continue to be
treated as an employee for purposes of the amended stock purchase plan until
the period of leave exceeds 90 days or the employee's right to reemployment is
no longer guaranteed by statute or by contract.

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<PAGE>

Participation

Employees may enroll in the amended stock purchase plan by completing a
purchase agreement and delivering it to Snyder Communications on or before the
15th day of the month preceding the next offering date. An offering date occurs
on the first day of each purchase period, which is established by the
administrative committee. Each purchase period generally lasts three months and
begins on the first business day of each January, April, July and October. The
exercise date is the last day of a purchase period, which ends on the last
business day of the three-month period. The first purchase period began July 1,
1999 and ends on September 30, 1999.

To enroll in the amended stock purchase plan, an employee must be employed by
Snyder Communications or by one of its subsidiaries as of the first day of the
purchase period for which the employee initially enrolls. The effective date of
the employee's participation in the plan is the offering date following the
date on which the administrative committee receives the required paperwork from
the employee.

Enrollment in the amended stock purchase plan continues automatically from
one purchase period to the next unless the participating employee gives notice
of his or her intent to withdraw from the plan.

Payroll Deduction

The purchase agreement described above authorizes Snyder Communications to
deduct from the participating employee's compensation the percentage that the
employee elects in 1% increments. A participating employee can elect from 1% to
10% of his or her total compensation. Total compensation generally includes all
taxable compensation and pre-tax employee contributions to a 401(k) plan or
cafeteria plan, and excludes reimbursement of expenses and gains that result
from participating in any of Snyder Communications' stock option plans. The
amount deducted from the employee's compensation will then be credited to the
employee's stock purchase account. Payroll deductions are the only method by
which the stock purchase account may be funded. Amounts credited to the stock
purchase account may be used for any corporate purpose.

Changes in Amount of Payroll Deduction

The participating employee may not change the amount by which his or her
payroll is reduced or the class of common stock to be purchased during any
purchase period, but the employee may increase or decrease the amount or change
the mix of common stock to be purchased for any future purchase period. To do
so, the employee must sign and deliver to Snyder Communications, on or before
the 15th day of the month before the next offering date, a payroll deduction
change form or a new purchase agreement, as may be appropriate.

Purchase of Stock

On the exercise date, the entire amount in a participating employee's stock
purchase account will be applied to the purchase of shares of SNC stock and/or
circle.com as agreed to by the employee in his or her purchase agreement. The
purchase price for these shares will be 85% of the market value of the class of
common stock being purchased on the exercise date. An employee may not purchase
more than 800 shares of common stock on any one exercise date or more than
$25,000 worth of common stock during any calendar year.

Unless an employee's participation is discontinued, his or her right to
purchase shares will be exercised automatically on each exercise date
designated by the administrative committee at the applicable prices.

Termination of Participation

A participating employee may voluntarily withdraw from the amended stock
purchase plan at any time by delivering to Snyder Communications a notice of
withdrawal. In order to payroll deductions to cease as of a particular payday,
the notice of withdrawal must be received by Snyder Communications at least 15
days prior to the end of that pay period. If the notice of withdrawal becomes
effective at any time other than the

114
<PAGE>

beginning of a future purchase period, amounts already credited to the
participating employee's stock purchase account will be refunded to the
employee. An employee who withdraws may re-enroll as a participant for any
future purchase period by timely submitting a new purchase agreement.

Participation in the plan ceases automatically when:

. the employee's employment with Snyder Communications terminates for any
reason; or

. the employee voluntarily withdraws from the plan.

Upon the occurrence of any of these events, the entire amount in the
employee's stock purchase account will be refunded to him or her (or his or her
estate).

Restrictions on Transfer

During the participating employee's lifetime, all rights under the plan are
exercisable only by the employee in question. Upon the employee's death, any
shares in his or her stockholder account and the remaining balance in his or
her stock purchase account will be delivered to the executor of his or her
estate.

Resale of Shares

The shares of common stock acquired under the plan may not be sold or
otherwise disposed of for at least three months after the exercise date on
which the shares were acquired, except in case of death or disability. The
shares of common stock sold under the plan will be registered for sale under
the Securities Act of 1933. As a result, after the three month holding period
employees may resell any shares purchased under the plan without restriction,
provided that such employees are not affiliates of Snyder Communications.
Affiliates will be required to resell any shares purchased under the Plan in
accordance with the restrictions imposed by Rule 144 of the Securities Act.

Limitation on Shares Issuable

The number of shares issuable under the amended stock purchase plan is
limited to 2,500,000 shares of SNC stock and 625,000 shares of circle.com
stock. If, on any exercise date, the number of shares remaining under the plan
is insufficient to cover purchases that could otherwise be made from all stock
purchase accounts, the number of shares purchased by each participant may be
limited. In that case, the administrative committee will allocate the available
shares pro rata among the participants, and any cash balance remaining in a
participant's stock purchase account will be refunded to the participant.

Antidilution

The aggregate number and kind of shares of common stock reserved for purchase
under the plan, and the calculation of the purchase price per share, may be
appropriately adjusted to reflect any increase or decrease in the number of
issued shares of common stock resulting from a subdivision or consolidation of
shares of either or both classes of common stock, or other capital adjustment,
or the payment of a stock dividend, or other increase or decrease in the
shares, if effected without receipt of consideration by Snyder Communications.

Adjustment of Outstanding Offer

To the extent that the recapitalization becomes effective during an
outstanding purchase period, participating employees' stock purchase accounts
will be applied to the purchase of SNC stock and circle.com stock in the same
ratio as existing common stock will be exchanged for SNC stock and circle.com
stock in the recapitalization. That is, accounts will be applied to purchase
four shares of SNC stock for every one share of circle.com stock purchased
under the plan for that purchase period.

115
<PAGE>

Termination of the Stock Purchase Plan

The plan will end:

. immediately after any exercise date on which all available shares under
the plan have been purchased;

. at any time at the discretion of board of directors; or

. with respect to a class of common stock if that common stock ceases to
be listed on a nationally recognized exchange.

Amendment of the Stock Purchase Plan

The board of directors generally may further amend the stock purchase plan
from time to time, except that no revision or amendment to the plan may be
made:

. without approval of the stockholders of Snyder Communications, if
federal or state law, or the rules of any stock exchange on which either
class of common stock is listed, require the revision or amendment in
question to be approved by the stockholders of Snyder Communications; or

. without approval of the affected plan participant if the revision or
amendment would materially impair the rights of the participant under
any award already granted to the participant.

Federal Income Tax Information

Rights granted under the plan are intended to qualify for favorable federal
income tax treatment associated with rights granted under an "employee stock
purchase plan" within the meaning of Section 423 of the Code and are intended
to comply also with the provisions of Section 421 and 424 of the Code and the
rules and regulations issued under the Code.

Although the price paid for shares of a class of common stock purchased
under the plan is less than the market value of that class of common stock,
the participating employee need not report the portion of income that he or
she pays towards that price until the earlier of the following:

. the year in which the employee sells or otherwise disposes of the
shares; or

. the year of the employee's death, if he or she has not sold or otherwise
disposed of the shares prior to that time.

The amount by which the market value of the shares on the exercise date
exceeds the purchase price is subject to social security (FICA) taxes on the
exercise date and, accordingly, Snyder Communications will withhold these FICA
taxes from the employee's pay.

If the employee sells or otherwise disposes of his or her shares within two
years after the offering date of the shares, the employee must report ordinary
income equal to the amount by which the market value of the shares on the
exercise date exceeds the purchase price of the shares.

If the employee sells or otherwise disposes of his or her shares more than
two years after the offering date of the shares or dies at any time while
holding the shares, the employee must report ordinary income equal to the
lesser of (1) 15% of the market value of the shares on their offering date, or
(2) the amount by which the market value at the time of the disposition or
death exceeds the purchase price of the shares.

When the employee reports taxable income in one of the manners described
above (other than in the event of such employee's death), the amount reported
is added to the purchase price of the shares to determine the basis of the
shares for the purpose of computing capital gain or loss on the disposition of
the shares.

116
<PAGE>

If the employee disposes of his or her shares within two years from the
offering date of the shares, Snyder Communications will deduct from its income
in the year of the disposition an amount equal to the ordinary income the
employee is required to report in his or her income tax return. Snyder
Communications will not be entitled to any such deduction from its income if
the employee holds the shares for more than two years from the offering date or
dies before disposing of the shares.

Snyder Communications is authorized to satisfy any tax withholding obligation
that may arise with respect to the purchase or disposition of any shares of
common stock under the plan through any means it deems appropriate.

Recommendation of the Board of Directors

Our board of directors has unanimously approved the amended and restated
stock purchase plan and believes its adoption to be in our best interests and
the best interests of our stockholders. Accordingly, our board of directors
unanimously recommends that you vote "for" the proposal.

Proposal 3 is conditioned upon approval by stockholders of the
recapitalization proposal and the stock incentive plan proposal. If either
proposal is not approved by stockholders and implemented by the board, Proposal
3 will not be implemented.

117
<PAGE>

EXECUTIVE COMPENSATION

Summary Compensation Table

This table sets forth the compensation paid to our chief executive officer
and to each of our other executive officers for 1998.

Summary Compensation Table

<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
--------------------------------- -----------------------
Awards
Securities
Other Annual Underlying All Other
Salary Bonus Compensation Options Compensation
Name and Principal Position Year ($) ($) ($) (#) ($)
- --------------------------- ---- ------- ------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Daniel M. Snyder......... 1998 300,000 -- -- -- --
Chairman of the Board of
Directors and 1997 300,000 -- -- -- --
Chief Executive Officer 1996 300,000 100,000 -- -- --
Michele D. Snyder........ 1998 200,000 -- -- -- --
Vice Chairman, President
and 1997 200,000 -- -- -- --
Chief Operating Officer 1996 200,000 100,000 -- -- --
A. Clayton Perfall....... 1998 300,000 50,000 -- -- --
Chief Financial Officer 1997 300,000 50,000 -- 200,000 --
1996 79,612 -- -- 400,000 --
</TABLE>

Stock Option Grants in 1998

We did not award stock options to Daniel M. Snyder, Michele D. Snyder or A.
Clayton Perfall during 1998. As of the date of this proxy statement, we have
not granted any stock appreciation rights or restricted stock awards to these
persons.

This table sets forth information concerning stock options exercised and the
number and value of unexercised stock options at December 31, 1998.

Aggregate Option Exercises in 1998 And Fiscal Year-End Option Values

<TABLE>
<CAPTION>
Shares Number of Securities Value of Unexercised
Acquired Underlying Unexercised In-the-Money Options
on Exercise Value Options at Fiscal Year-End (#) Options at Fiscal Year-End ($)
Name (#) Realized Exercisable/Unexercisable Exercisable/Unexercisable(2)
- ---- ----------- ----------- ------------------------------ ------------------------------
<S> <C> <C> <C> <C>
A. Clayton Perfall...... 40,000 $952,537.75(1) 210,000/250,000 $3,336,250/$3,643,750
</TABLE>
- --------
(1) Based on an exercise price of $17.00 per share for all 40,000 options
exercised and a fair market value at time of sale of $45.50 for 1,500 of
the shares of existing common stock, $44.9615 for 18,500 of the shares of
existing common stock, and $36.625 for 20,000 of the shares
(2) Based on a fair market value of $33.75 at December 31, 1998.

Executive Employment Contracts

We entered into employment agreements with each of the executive officers
named in the Summary Compensation Table above. Our employment agreement with
Mr. Perfall provides that we will employ him on an "at will" basis. Mr.
Perfall's base salary for 1998 was $300,000. The employment agreement between
us and Mr. Perfall also provides for incentive bonuses based on attaining
specific performance criteria. This agreement also includes a non-competition
commitment during the term of the agreement and for a period of 18 months
after termination of the agreement and contains non-competition and
confidentiality commitments,

118
<PAGE>

non-solicitation of employee and customer provisions, and assignment of work
product agreements. In addition, we agreed to grant to Mr. Perfall non-
qualified stock options to acquire common stock at the time of our initial
public offering in 1996.

We also entered into employment agreements with Mr. Snyder and Ms. Snyder,
which were effective in September 1996 and are for a term of three years,
unless sooner terminated as provided in the agreements. The agreements provide
that Mr. Snyder's 1998 base salary was $300,000 and Ms. Snyder's 1998 base
salary was $200,000. The agreement with Mr. Snyder and Ms. Snyder also provide
for incentive bonuses based on attaining performance criteria to be established
by the compensation committee or the board of directors, and include a non-
competition commitment during the term of the agreement, confidentiality
commitments, non-solicitation of employee and customer provisions, and
assignment of work product agreements.

We also entered into employment agreements with other officers. These
agreements generally include certain non-competition agreements,
confidentiality commitments, non-solicitation of employee provisions and
assignment of work product agreements.

PRICE RANGE ON EXISTING COMMON STOCK
AND DIVIDEND POLICY

The following table shows the high and low sales prices of our existing
common stock on the New York Stock Composite Tape during the periods indicated:

<TABLE>
<CAPTION>
High Low
-------- --------
<S> <C> <C>
1997
First Quarter........................................... $32 1/2 $23 1/2
Second Quarter.......................................... 28 20 5/8
Third Quarter........................................... 31 1/16 24
Fourth Quarter.......................................... 37 1/4 28
1998
First Quarter........................................... $47 1/4 $32 9/16
Second Quarter.......................................... 53 5/8 37 7/8
Third Quarter........................................... 49 1/2 30 1/8
Fourth Quarter.......................................... 37 9/16 28 3/8
1999
First Quarter........................................... $41 $24 3/8
Second Quarter (through June 22)........................ 31 7/16 20 3/4
</TABLE>

The closing sale price of our existing common stock on the New York Stock
Exchange was $29 3/16 per share on May 11, 1999, the trading day prior to our
announcement of the recapitalization proposal, and $ per share on , 1999,
the third trading day prior to the date of this proxy statement and prospectus.
As of June 22, 1999, there were 75,580,975 shares of our existing common stock
outstanding and holders of record.

INFORMATION ABOUT
STOCKHOLDER PROPOSALS

If you wish to submit proposals to be included in the proxy statement for our
2000 annual meeting, we must receive them on or before December 2, 1999. Please
address your proposals to: Snyder Communications Inc., Two Democracy Center,
6903 Rockledge Drive, 15th Floor, Bethesda, Maryland 20817, Attention:
Secretary. Your proposal, if you choose to submit one, has to include specified
information about the proposed business and yourself.

119
<PAGE>

EXPENSES OF SOLICITATION

We will pay the cost of soliciting proxies for the special meeting. In
addition to soliciting by mail, our directors, officers and other employees may
solicit proxies in person, or by telephone, facsimile transmission or other
means of electronic communication. We will also pay brokers, nominees,
fiduciaries and other custodians their reasonable fees and expenses for sending
proxy materials to beneficial owners and obtaining their instructions. We have
retained Innisfree M&A Incorporated to perform various solicitation services
and Deutsche Banc Alex. Brown to perform various advisory and solicitation
services. We have agreed to pay Innisfree a customary fee for their services.
For information about compensation that we will pay Deutsche Banc Alex. Brown
for its services, you should read "Proposal 1--The Recapitalization Proposal--
Financial Advisors."

LEGAL OPINIONS

Weil, Gotshal & Manges LLP, New York, New York, has rendered opinions
concerning the validity of the common stock and concerning certain tax matters
described under "Proposal 1--The Recapitalization Proposal--Material Federal
Income Tax Consequences."

EXPERTS

The historical consolidated financial statements of Snyder Communications,
Inc. as of December 31, 1998 and 1997 and for each of the three years in the
period ended December 31, 1998 and the related schedule included in this proxy
statement and prospectus and elsewhere in the registration statement have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their reports with respect thereto. In those reports, that firm states that
with respect to the 1996 operations of Brann Holdings Limited and its
subsidiaries and American List Corporation and its subsidiaries, their opinions
are based on the reports of other independent public accountants, namely Price
Waterhouse, Chartered Accountants and Registered Auditors and Grant Thornton
LLP. The historical combined financial statements of SNC as of December 31,
1998 and 1997 and for each of the three years in the period ended December 31,
1998 and the related schedule included in this proxy statement and prospectus
and elsewhere in this registration statement have been audited by Arthur
Andersen LLP, independent public accountants, as set forth in their reports. In
those reports, that firm states that with respect to the 1996 operations of
Brann Holdings Limited and American List Corporation and its subsidiaries,
their opinions are based on the reports of other independent public
accountants, namely Price Waterhouse, Chartered Accountants and Registered
Auditors and Grant Thorton LLP. These financial statements and supporting
schedules have been included in this proxy statement and prospectus in reliance
upon the authority of those firms as experts in auditing and accounting.

The historical combined financial statements of circle.com as of December 31,
1998 and 1997 and for each of the three years in the period ended December 31,
1998 and the related schedule included in this proxy statement and prospectus
and elsewhere in this registration statement have been audited by Arthur
Andersen LLP, independent public accountants as indicated in their reports with
respect thereto. These financial statements and supporting schedules referred
to above have been included in this proxy statement and prospectus in reliance
upon the authority of said firm as experts in giving said reports.

The consolidated financial statements of Brann Holdings Limited and its
subsidiaries as of December 31, 1996 and for the year then ended, have been
audited by Price Waterhouse, Chartered Accountants, as set forth in its report
included in this proxy statement and prospectus.

The consolidated financial statements of American List Corporation and its
subsidiaries as of February 28, 1997 and for the year then ended, have been
audited by Grant Thornton LLP, independent certified public accountants as set
forth in its report included in this proxy statement and prospectus.

By order of the board of directors,

David B. Pauken
Secretary

120
<PAGE>

SNYDER COMMUNICATIONS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Snyder Communications, Inc.
Consolidated Financial Statements
Report of Independent Public Accountants.................................. F-2
Consolidated Balance Sheet as of December 31, 1998 and 1997 and March 31,
1999 (unaudited)......................................................... F-3
Consolidated Statement of Income, including unaudited pro forma data, for
the years ended December 31, 1998, 1997 and 1996 and the three months
ended March 31, 1999 (unaudited)
and March 31, 1998 (unaudited)........................................... F-4
Consolidated Statement of Equity and Comprehensive Income for the years
ended
December 31, 1998, 1997 and 1996 and the three months ended March 31,
1999 (unaudited)......................................................... F-5
Consolidated Statement of Cash Flows for the years ended December 31,
1998, 1997 and 1996
and the three months ended March 31, 1999 (unaudited) and March 31, 1998
(unaudited).............................................................. F-7
Notes to Consolidated Financial Statements................................ F-9
Brann Holdings Limited
Report of Independent Accountants......................................... F-35
American List Corporation
Report of Independent Certified Public Accountants........................ F-36
SNC
Combined Financial Statements
Report of Independent Public Accountants.................................. F-37
Combined Balance Sheet as of December 31, 1998 and 1997 and March 31, 1999
(unaudited).............................................................. F-38
Combined Statement of Income, including unaudited pro forma data, for the
years ended
December 31, 1998, 1997 and 1996 and the three months ended March 31,
1999 (unaudited) and March 31, 1998 (unaudited).......................... F-39
Combined Statement of Cash Flows for the years ended December 31, 1998,
1997 and 1996 and the three months ended March 31, 1999 (unaudited) and
March 31, 1998 (unaudited)............................................... F-40
Notes to Combined Financial Statements.................................... F-42
Brann Holdings Limited
Report of Independent Accountants......................................... F-66
American List Corporation
Report of Independent Certified Public Accountants........................ F-67
Circle.com
Combined Financial Statements
Report of Independent Public Accountants.................................. F-68
Combined Balance Sheet as of December 31, 1998 and 1997 and March 31, 1999
(unaudited).............................................................. F-69
Combined Statement of Operations including unaudited pro forma data, for
the years
ended December 31, 1998, 1997 and 1996 and the three months ended March
31, 1999 (unaudited) and 1998 (unaudited)................................ F-70
Combined Statement of Cash Flows for the years ended December 31, 1998,
1997 and 1996
and the three months ended March 31, 1999 (unaudited) and 1998
(unaudited) ............................................................. F-71
Notes to Combined Financial Statements.................................... F-72
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of Snyder Communications, Inc.:

We have audited the accompanying consolidated balance sheets of Snyder
Communications, Inc. and subsidiaries (the "Company") as of December 31, 1998
and 1997, and the related consolidated statements of income, equity and
comprehensive income and cash flows for each of the years in the three year
period ended December 31, 1998. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits. We did
not audit the 1996 financial statements of American List Corporation or Brann
Holdings Limited included in the consolidated financial statements of the
Company, which statements reflect revenues constituting 19% of the related
consolidated total in 1996. These statements were audited by other auditors
whose reports have been furnished to us, and our opinion expressed herein,
insofar as it relates to the amounts included for 1996 for American List
Corporation or Brann Holdings Limited, is based solely upon the reports of the
other auditors.

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

In our opinion, based on our audits and the reports of the other auditors,
the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Snyder Communications, Inc. and
subsidiaries as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the years in the three year period
ended December 31, 1998, in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

Washington, D.C.
June 22, 1999

F-2
<PAGE>

SNYDER COMMUNICATIONS, INC.
(See Note 1)

Consolidated Balance Sheet
(in thousands)

<TABLE>
<CAPTION>
March 31, December 31,
---------- ------------------
1999 1998 1997
---------- -------- --------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current
assets:
Cash and equivalents.......................... $ 56,404 $ 47,931 $ 71,789
Marketable securities......................... -- 612 1,241
Accounts receivable, net of allowance for
doubtful accounts of $6,393, $7,031 and
$3,893 at March 31, 1999, December 31, 1998
and 1997, respectively....................... 94,759 78,901 68,365
Receivables from pass-through costs........... 97,675 86,015 77,221
Related party receivables..................... 190 190 1,428
Unbilled services............................. 10,295 19,708 13,960
Current portion of deferred tax asset......... 12,341 13,671 8,357
Other current assets.......................... 17,651 11,560 14,126
Net current assets of discontinued
operations................................... 33,594 24,447 --
-------- -------- --------
Total current assets........................ 322,909 283,035 256,487
-------- -------- --------
Property and equipment, net.................... 71,329 70,367 41,251
Goodwill and other intangible assets, net...... 140,025 72,288 42,660
Deferred tax asset............................. 86,401 86,637 --
Deposits and other assets...................... 5,493 5,645 8,198
Net long-term assets of discontinued
operations.................................... 112,211 95,280 33,541
-------- -------- --------
Total assets................................ $738,368 $613,252 $382,137
======== ======== ========
LIABILITIES AND
EQUITY
Current liabilities:
Lines of credit............................... $ 1,500 $ 1,825 $ 9,175
Current maturities of long-term debt.......... 1,063 1,085 2,478
Accrued payroll............................... 15,507 13,423 10,777
Accounts payable.............................. 116,235 114,541 99,384
Accrued expenses.............................. 94,314 80,547 69,543
Client advances............................... 4,783 11,753 12,675
Unearned revenue.............................. 18,974 14,535 16,002
Net current liabilities of discontinued
operations................................... -- -- 23,170
-------- -------- --------
Total current liabilities................... 252,376 237,709 243,204
-------- -------- --------
Related party borrowings....................... 8,628 8,924 7,072
Long-term obligations under capital leases..... 1,570 1,743 1,849
Long-term debt, net of current maturities...... 1,440 1,616 3,935
Other liabilities.............................. 3,637 2,922 2,538
Commitments and contingencies
Redeemable ESOP stock, 90, 88 and 147 shares
outstanding at March 31, 1999, December 31,
1998 and 1997, respectively................... 2,425 2,960 5,278
Equity:
Preferred stock, $.001 par value per share,
5,000 shares authorized, none issued and
outstanding at March 31, 1999, December 31,
1998 and 1997................................ -- -- --
Common stock, $.001 par value per share,
400,000, 400,000 and 120,000 shares
authorized, 74,986, 71,480 and 67,950 shares
issued and outstanding at March 31, 1999,
December 31, 1998 and 1997, respectively..... 75 71 68
Additional paid-in capital.................... 470,117 375,114 180,086
Treasury stock, at cost, 1,053 shares at
December 31, 1997............................ -- -- (42,705)
Accumulated other comprehensive income
(loss)....................................... (1,714) 1,829 640
Retained deficit.............................. (186) (19,636) (19,828)
-------- -------- --------
Total equity................................ 468,292 357,378 118,261
-------- -------- --------
Total liabilities and equity................ $738,368 $613,252 $382,137
======== ======== ========
</TABLE>
The accompanying notes are an integral part of this consolidated balance sheet.

F-3
<PAGE>

SNYDER COMMUNICATIONS, INC.
(See Note 1)

CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share amounts)

<TABLE>
<CAPTION>
For the
Three Months Ended For the Years
March 31, Ended December 31,
-------------------- ----------------------------
1999 1998 1998 1997 1996
--------- --------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
Net revenues............... $ 138,081 $ 109,584 $493,803 $403,072 $349,223
Operating expenses:
Cost of services.......... 90,930 71,497 322,980 273,899 236,793
Selling, general and
administrative
expenses................. 24,168 23,975 96,362 93,371 77,705
Compensation to
stockholders............. -- 192 573 12,422 4,939
ESOP expense.............. -- -- -- 5,411 6,553
Acquisition and related
costs.................... 709 22,597 38,941 31,389 --
--------- --------- -------- -------- --------
Income (loss) from
operations................ 22,274 (8,677) 34,947 (13,420) 23,233
Interest expense, including
amounts to related parties
of $84, $148, $541, $1,491
and $2,103 in the three
months ended March 31,
1999 and 1998
and the years ended 1998,
1997 and 1996,
respectively.............. (286) (441) (1,753) (3,178) (5,385)
Investment income.......... 670 898 3,638 2,944 2,371
--------- --------- -------- -------- --------
Income (loss) from
continuing operations
before income taxes....... 22,658 (8,220) 36,832 (13,654) 20,219
Income tax provision
(benefit)................. 8,832 (3,644) 15,472 2,982 4,738
--------- --------- -------- -------- --------
Income (loss) from
continuing operations..... 13,826 (4,576) 21,360 (16,636) 15,481
Income (loss) from
discontinued operations
(net of income taxes)..... 5,089 (4,052) 1,446 (10,225) (1,415)
--------- --------- -------- -------- --------
Income (loss) before
extraordinary item........ 18,915 (8,628) 22,806 (26,861) 14,066
Extraordinary item, less
applicable income taxes of
$806...................... -- -- -- -- (1,216)
--------- --------- -------- -------- --------
Net income (loss)..... $ 18,915 $ (8,628) $ 22,806 $(26,861) $ 12,850
========= ========= ======== ======== ========
Historical net income
(loss) per share:
Basic net income (loss)
per share:
Continuing operations... $ 0.19 $ (0.07) $ 0.31 $ (0.26) $ 0.26
Discontinued
operations............. 0.07 (0.06) 0.02 (0.16) (0.02)
Extraordinary item...... -- -- -- -- (0.02)
--------- --------- -------- -------- --------
Total basic net income
(loss) per share......... $ 0.26 $ (0.13) $ 0.33 $ (0.42) $ 0.22
========= ========= ======== ======== ========
Diluted net income (loss)
per share:
Continuing operations... $ 0.19 $ (0.07) $ 0.30 $ (0.26) $ 0.26
Discontinued
operations............. 0.07 (0.06) 0.02 (0.16) (0.02)
Extraordinary item...... -- -- -- -- (0.02)
--------- --------- -------- -------- --------
Total diluted net income
(loss) per share......... $ 0.26 $ (0.13) $ 0.32 $ (0.42) $ 0.22
========= ========= ======== ======== ========
Pro forma net income (loss)
per share (unaudited)(Note
3):
Basic net income (loss)
per share:
Continuing operations... $ 0.19 $ (0.10) $ 0.27 $ (0.30) $ 0.19
Discontinued
operations............. 0.07 (0.06) 0.02 (0.18) (0.06)
Extraordinary item...... -- -- -- -- (0.02)
--------- --------- -------- -------- --------
Total basic net income
(loss) per share......... $ 0.26 $ (0.16) $ 0.29 $ (0.48) $ 0.11
========= ========= ======== ======== ========
Diluted net income (loss)
per share:
Continuing operations... $ 0.19 $ (0.10) $ 0.26 $ (0.30) $ 0.19
Discontinued
operations............. 0.07 (0.06) 0.02 (0.18) (0.06)
Extraordinary item...... -- -- -- -- (0.02)
--------- --------- -------- -------- --------
Total diluted net income
(loss) per share......... $ 0.26 $ (0.16) $ 0.28 $ (0.48) $ 0.11
========= ========= ======== ======== ========
</TABLE>

The accompanying notes are an integral part of this consolidated statement of
income.

F-4
<PAGE>

SNYDER COMMUNICATIONS, INC.
(See Note 1)

CONSOLIDATED STATEMENT OF EQUITY AND COMPREHENSIVE INCOME

<TABLE>
<CAPTION>
Accumulated
Common Common Additional Retained Limited Unearned Other
Stock Stock Paid-In Earnings Partners' ESOP Treasury Comprehensive
Shares Par Value Capital (Deficit) Deficit Compensation Stock Income (Loss) Total
---------- --------- ---------- --------- --------- ------------ -------- ------------- -------
(in thousands, except share data)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December
31, 1995, as
previously
restated for
poolings......... 31,896,000 $32 $15,857 $28,987 $(1,450) $(4,324) $(3,585) $527 $36,044
Distributions
and dividends... -- -- -- (27,735) (8,612) -- -- -- (36,347)
Net proceeds
from stock
issuances....... 4,747,000 5 59,662 -- -- -- -- -- 59,667
Exercise of
stock options
and subsidiary
stock
appreciation
rights.......... 63,000 -- 1,005 -- -- -- -- -- 1,005
Foreign currency
translation
adjustment...... -- -- -- -- -- -- -- (154) (154)
Unrealized loss
on marketable
securities...... -- -- -- -- -- -- -- (111) (111)
Purchases and
retirements of
treasury stock.. (1,727,000) (2) (2,777) (124) -- -- (6,433) -- (9,336)
Reissuance of
treasury stock.. -- -- 95 -- -- -- 475 -- 570
Release of ESOP
shares.......... -- -- 2,429 (538) -- 2,758 -- -- 4,649
Reclassification
of redeemable
ESOP stock...... -- -- (2,183) -- -- -- -- -- (2,183)
Reorganization.. 28,959,000 29 (15,558) 7,630 7,899 -- -- -- --
Capital
contribution -
acquired
subsidiary...... -- -- 469 -- -- -- -- -- 469
Net income...... -- -- -- 10,687 2,163 -- -- -- 12,850
---------- --- ------- ------- ------- ------- ------- ---- -------
Comprehensive
income..........

<CAPTION>
Comprehensive
Income (Loss)
-------------
<S> <C>
Balance, December
31, 1995, as
previously
restated for
poolings......... $ --
Distributions
and dividends... --
Net proceeds
from stock
issuances....... --
Exercise of
stock options
and subsidiary
stock
appreciation
rights.......... --
Foreign currency
translation
adjustment...... (154)
Unrealized loss
on marketable
securities...... (111)
Purchases and
retirements of
treasury stock.. --
Reissuance of
treasury stock.. --
Release of ESOP
shares.......... --
Reclassification
of redeemable
ESOP stock...... --
Reorganization.. --
Capital
contribution -
acquired
subsidiary...... --
Net income...... 12,850
-------------
Comprehensive
income.......... $ 12,585
=============
Balance, December
31, 1996......... 63,938,000 64 58,999 18,907 -- (1,566) (9,543) 262 67,123
Distributions
and dividends... -- -- -- (8,968) -- -- -- -- (8,968)
Net proceeds
from stock
issuances....... 1,850,000 2 42,711 -- -- -- -- -- 42,713
Exercise of
stock options
and subsidiary
stock
appreciation
rights.......... 1,789,000 2 39,179 -- -- -- -- -- 39,181
Issuance of
shares for
purchase of
subsidiaries.... 644,000 1 14,013 -- -- -- -- -- 14,014
Foreign currency
translation
adjustment...... -- -- -- -- -- -- -- 356 356
Unrealized gain
on marketable
securities...... -- -- -- -- -- -- -- 22 22
Purchases and
retirements of
treasury stock.. (740,000) (1) (4,241) (151) -- -- 3,011 -- (1,382)
Reissuance of
treasury stock.. 105,000 -- 3,950 -- -- -- 947 -- 4,897
Release of ESOP
shares.......... -- -- 1,971 -- -- 1,566 -- -- 3,537
Reclassification
of redeemable
ESOP stock...... -- -- (2,826) -- -- -- -- -- (2,826)
Recapitalization
of certain
subsidiaries
acquired in
1998............ 364,000 -- 20,827 (1,250) -- -- (37,120) -- (17,543)
Capital
contribution -
acquired
subsidiary...... -- -- 5,503 -- -- -- -- -- 5,503
Net loss........ -- -- -- (26,861) -- -- -- -- (26,861)
Impact from
differing fiscal
year end (Note
1).............. -- -- -- (1,505) -- -- -- -- (1,505)
---------- --- ------- ------- ------- ------- ------- ---- -------
Comprehensive
loss............

Balance, December
31, 1996......... --
Distributions
and dividends... --
Net proceeds
from stock
issuances....... --
Exercise of
stock options
and subsidiary
stock
appreciation
rights.......... --
Issuance of
shares for
purchase of
subsidiaries.... --
Foreign currency
translation
adjustment...... 356
Unrealized gain
on marketable
securities...... 22
Purchases and
retirements of
treasury stock.. --
Reissuance of
treasury stock.. --
Release of ESOP
shares.......... --
Reclassification
of redeemable
ESOP stock...... --
Recapitalization
of certain
subsidiaries
acquired in
1998............ --
Capital
contribution -
acquired
subsidiary...... --
Net loss........ (26,861)
Impact from
differing fiscal
year end (Note
1).............. --
-------------
Comprehensive
loss............ $(26,483)
=============
</TABLE>

The accompanying notes are an integral part of this consolidated statement of
equity and comprehensive income.

F-5
<PAGE>

SNYDER COMMUNICATIONS, INC.
(See Note 1)

CONSOLIDATED STATEMENT OF EQUITY AND COMPREHENSIVE INCOME
(CONTINUED)

<TABLE>
<CAPTION>
Accumulated
Common Common Additional Retained Limited Unearned Other
Stock Stock Paid-In Earnings Partners' ESOP Treasury Comprehensive
Shares Par Value Capital (Deficit) Deficit Compensation Stock Income (Loss) Total
---------- --------- ---------- --------- --------- ------------ -------- ------------- --------
(in thousands, except share data)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December
31, 1997......... 67,950,000 68 180,086 (19,828) -- -- (42,705) 640 118,261
Distributions
and dividends... -- -- -- (7,316) -- -- -- -- (7,316)
Net proceeds
from secondary
stock
issuances....... 500,000 -- 17,329 -- -- -- -- -- 17,329
Exercise of
stock options
and subsidiary
stock
appreciation
rights.......... 1,094,000 1 32,259 -- -- -- 19 -- 32,279
Issuance of
shares for
purchase of
subsidiaries and
property........ 1,906,000 2 59,665 -- -- -- -- -- 59,667
Foreign currency
translation
adjustment...... -- -- -- -- -- -- -- 1,242 1,242
Unrealized loss
on marketable
securities...... -- -- -- -- -- -- -- (53) (53)
Purchases and
retirements of
treasury stock.. (1,152,000) (1) (2,471) (17,617) -- -- 14,742 -- (5,347)
Reissuance of
treasury stock.. 1,064,000 1 7,065 -- -- -- 27,944 -- 35,010
Reclassification
of redeemable
ESOP stock...... -- -- -- 2,319 -- -- -- -- 2,319
Tax benefit from
taxable merger
transactions.... -- -- 76,927 -- -- -- -- -- 76,927
Issuance of
warrants by
acquired
subsidiary...... -- -- 219 -- -- -- -- -- 219
Shares and
options issued
by acquired
subsidiaries as
compensation.... 118,000 -- 4,035 -- -- -- -- -- 4,035
Net income...... -- -- -- 22,806 -- -- -- -- 22,806
---------- --- -------- -------- ---- ---- ------- ------- --------
Comprehensive
income..........

<CAPTION>
Comprehensive
Income (Loss)
-------------
<S> <C>
Balance, December
31, 1997......... --
Distributions
and dividends... --
Net proceeds
from secondary
stock
issuances....... --
Exercise of
stock options
and subsidiary
stock
appreciation
rights.......... --
Issuance of
shares for
purchase of
subsidiaries and
property........ --
Foreign currency
translation
adjustment...... 1,242
Unrealized loss
on marketable
securities...... (53)
Purchases and
retirements of
treasury stock.. --
Reissuance of
treasury stock.. --
Reclassification
of redeemable
ESOP stock...... --
Tax benefit from
taxable merger
transactions.... --
Issuance of
warrants by
acquired
subsidiary...... --
Shares and
options issued
by acquired
subsidiaries as
compensation.... --
Net income...... 22,806
-------------
Comprehensive
income.......... $23,995
=============

Balance, December
31, 1998......... 71,480,000 $71 $375,114 $(19,636) $-- $-- $ -- $ 1,829 $357,378
Exercise of
stock options
(unaudited)..... 437,000 1 12,721 -- -- -- -- -- 12,722
Issuance of
shares for
purchase of
subsidiaries and
property
(unaudited)..... 3,069,000 3 82,282 -- -- -- -- -- 82,285
Foreign currency
translation
adjustment
(unaudited)..... -- -- -- -- -- -- -- (3,532) (3,532)
Unrealized loss
on marketable
securities
(unaudited)..... -- -- -- -- -- -- -- (11) (11)
Reclassification
of redeemable
ESOP stock
(unaudited)..... -- -- -- 535 -- -- -- -- 535
Tax benefit from
taxable merger
transactions
(unaudited)..... -- -- -- -- -- -- -- -- --
Net income
(unaudited)..... -- -- -- 18,915 -- -- -- -- 18,915
Comprehensive
income
(unaudited).....
---------- --- -------- -------- ---- ---- ------- ------- --------
Balance, March
31, 1999
(unaudited)...... 74,986,000 $75 $470,117 $ (186) $ -- $ -- $ -- $(1,714) $468,292
========== === ======== ======== ==== ==== ======= ======= ========
Balance, December
31, 1998.........
Exercise of
stock options
(unaudited)..... $ --
Issuance of
shares for
purchase of
subsidiaries and
property
(unaudited)..... --
Foreign currency
translation
adjustment
(unaudited)..... (3,532)
Unrealized loss
on marketable
securities
(unaudited)..... (11)
Reclassification
of redeemable
ESOP stock
(unaudited)..... --
Tax benefit from
taxable merger
transactions
(unaudited)..... --
Net income
(unaudited)..... 18,915
-------------
Comprehensive
income
(unaudited)..... $15,372
=============
Balance, March
31, 1999
(unaudited)......
</TABLE>

The accompanying notes are an integral part of this consolidated statement of
equity and comprehensive income.

F-6
<PAGE>

SNYDER COMMUNICATIONS, INC.
(See Note 1)

CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)

<TABLE>
<CAPTION>
For the Three Months
Ended March 31, For the Years Ended December 31,
--------------------- ----------------------------------
1999 1998 1998 1997 1996
---------- ---------- ---------- ---------- ----------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from
operating activities of
continuing operations:
Income (loss) from
continuing
operations........... $ 13,826 $ (4,576) $ 21,360 $ (16,636) $ 15,481
Adjustments to
reconcile net income
(loss) from
continuing operations
to net cash provided
by (used in)
operating activities
of continuing
operations:
Depreciation and
amortization....... 5,272 3,660 17,527 13,517 12,898
Loss on repayment of
subordinated debt.. -- -- -- -- 2,021
Noncash charge from
accelerated vesting
of acquired
subsidiary
options............ -- -- 1,862 9,097 --
Noncash ESOP
expense............ -- -- -- 4,851 5,282
Deferred taxes...... 2,406 (9,131) (13,327) (7,501) (2,957)
Loss on disposal of
assets............. 41 122 600 3,011 1,029
Other noncash
amounts............ (11) 30 (9) 2,114 2,259
Changes in assets and
liabilities:
Accounts receivable,
net................ (13,676) (8,600) (1,433) (26,298) (5,513)
Receivables from
pass-through
costs.............. (7,744) (6,756) (8,794) (11,592) (28,998)
Related party
receivables........ -- (510) 1,238 776 945
Unbilled services... 12,329 6,461 (4,813) (3,182) (3,199)
Deposits and other
assets............. 201 (315) 2,592 1,065 (551)
Other current
assets............. (747) 109 632 1,252 (4,177)
Accrued payroll,
accounts payable
and accrued
expenses........... (903) 22,206 13,577 46,659 32,135
Client advances..... (6,971) (7,611) (2,630) -- --
Unearned revenue.... 3,907 (2,647) (1,887) 4,652 8,523
Impact from
differing fiscal
year ends.......... -- -- -- (2,761) --
--------- ---------- ---------- ---------- ----------
Net cash provided by
(used in) operating
activities of
continuing
operations......... 7,930 (7,558) 26,495 19,024 35,178
--------- ---------- ---------- ---------- ----------
Cash flows from
investing activities of
continuing operations:
Purchase of
subsidiaries, net of
cash acquired........ 1,553 (5,157) (14,408) (22,518) --
Purchase of property
and equipment........ (5,486) (9,349) (35,654) (18,735) (11,796)
Proceeds from sale of
equipment............ -- -- 7 50 74
Net sales of
marketable
securities........... 612 118 575 5,807 2,052
Purchase of intangible
assets............... (577) (199) (1,480) (729) (1,974)
Note and net advances
to stockholders of
acquired
subsidiaries......... -- 276 942 1,467 --
Impact from differing
fiscal year ends..... -- -- -- (446) --
--------- ---------- ---------- ---------- ----------
Net cash used in
investing activities
of continuing
operations........... (3,898) (14,311) (50,018) (35,104) (11,644)
--------- ---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of this consolidated statement of
cash flows.

F-7
<PAGE>

SNYDER COMMUNICATIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS--(Continued)
(in thousands)

<TABLE>
<CAPTION>
For the
Three Months For the Years Ended
Ended March 31, December 31,
---------------- -------------------------
1999 1998 1998 1997 1996
------- ------- ------- ------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from financing
activities of continuing
operations:
Repayment of long-term notes
payable to limited partners
and others..................... (77) 1,545 (1,740) (29,795) (3,388)
Proceeds from issuance of
subordinated debentures due to
related parties................ -- (425) -- 425 294
Repayment of subordinated
debentures due to related
parties........................ -- -- -- -- (6,900)
Distributions and dividends..... -- (2,683) (6,161) (7,755) (31,872)
Proceeds (repayment) from long-
term debt...................... 517 4,846 (8,723) 5,902 2,450
Proceeds from mandatorily
redeemable preferred stock..... -- -- -- -- 1,091
Redemption of mandatorily
redeemable preferred stock..... -- -- -- (6,183) --
Net borrowings (repayments) on
lines of credit................ (325) (5,795) (7,595) (1,306) (2,464)
Payments on capital lease
obligations.................... (570) (717) (2,087) (2,102) (1,115)
Proceeds from exercise of
options........................ 10,940 7,172 21,053 25,128 425
Proceeds from stock issuances... -- 6,952 52,339 43,250 60,532
Purchase and retirement of
treasury stock................. -- (2,096) (5,347) (1,382) (6,741)
Redemption/issuance of stock in
connection with
recapitalization of acquired
subsidiary..................... -- -- -- (16,769) --
Capital contribution--acquired
subsidiary..................... -- -- -- 5,503 --
Impact from differing fiscal
year ends...................... -- -- -- 3,704 --
------- ------- ------- ------- -------
Net cash provided by financing
activities of continuing
operations................... 10,485 8,799 41,739 18,620 12,312
Effect of exchange rate
changes........................ (290) 253 679 383 1,096
------- ------- ------- ------- -------
Net increase (decrease) in cash
and equivalents of continuing
operations..................... 14,227 (12,817) 18,895 2,923 36,942
Investments and advances (to)
from discontinued operations... (5,754) (5,780) (42,753) 167 7,998
Cash and equivalents, beginning
of period...................... 47,931 71,789 71,789 68,699 23,759
------- ------- ------- ------- -------
Cash and equivalents, end of
period......................... $56,404 $53,192 $47,931 $71,789 $68,699
======= ======= ======= ======= =======
Disclosure of supplemental cash
flow information:
Cash paid for interest
including dividends on
mandatorily redeemable
preferred stock................ 360 700 2,681 2,667 4,066
Cash paid for income taxes...... 4,260 2,338 13,811 7,726 8,276
Disclosure of noncash activities:
Equipment purchased under
capital leases................. -- 201 1,693 817 3,610
Distribution of note receivable
from stockholder to SMS
stockholders................... -- -- -- -- 2,725
Issuance of shares of common
stock for purchase of
subsidiaries................... 82,285 50,717 54,443 13,320 --
Issuance of note for purchase
of treasury stock.............. -- -- 5,242 215 2,595
Redemption of common stock in
exchange for note payable...... -- -- -- 457 --
Distribution of non-operating
assets and distribution
payable by subsidiary.......... -- -- 1,155 -- --
Issuance of common stock
related to stock appreciation
rights......................... -- 3,703 3,484 -- --
Tax benefit from exercise of
stock options.................. 1,781 1,829 7,742 5,312 99
Issuance of common stock for
conversion of subsidiary
debt........................... -- -- 1,741 -- --
Acquisition of property and
assumption of debt for common
stock.......................... -- -- 1,945 -- --
Issuance of notes for purchase
of subsidiary.................. -- 1,350 -- -- --
Tax benefit from taxable merger
transactions................... -- 44,348 76,927 -- --
</TABLE>

The accompanying notes are an integral part of this consolidated statement of
cash flows.

F-8
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization, Basis of Presentation and Business:

Organization

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

Snyder Communications, Inc., a Delaware corporation (the "Company"), was
incorporated on June 25, 1996, to continue the business operations of the
Partnership. The Company, in conjunction with all of the existing partners in
the Partnership, reorganized on September 24, 1996 (the "Reorganization"), upon
the effectiveness of the initial public offering of its common stock.

Prior to the Reorganization, SMS owned 63.85% of the Partnership, and the
limited partners owned the remaining 36.15%. The Reorganization resulted in the
stockholders of SMS exchanging 100% of their SMS stock for stock of the
Company, simultaneously with the limited partners exchanging their limited
partnership interests in the Partnership for common stock of the Company. After
consummation of the Reorganization, the Company owned 100% of the stock of SMS
and, directly and indirectly (through its ownership of SMS), 100% of the
interests in the Partnership. In connection with the Reorganization, 29,458,400
shares of common stock were issued to the stockholders of the Company. Because
of the continuity of ownership, the Reorganization was accounted for by
combining the assets, liabilities and operations of SMS, the Partnership and
the Company, at their historical cost basis.

On June 22, 1999, the Board of Directors of the Company approved a plan to
effect the distribution (the "Distribution") of the Company's healthcare
services business to existing stockholders. The Company intends to consummate
the Distribution in the third quarter of 1999 through a special dividend of one
share of common stock of a newly formed subsidiary, Snyder Healthcare Services,
Inc, for every two shares of existing common stock of the Company.

The Board of Directors of the Company has approved, subject to stockholder
approval, a "Recapitalization Proposal" that would result in authorization of
the Company to issue two classes of stock as follows: 80 million shares of
common stock designated as "circle.com stock" and 320 million shares of common
stock designated as "SNC stock". The circle.com stock is intended to track the
separate performance of the Company's Internet professional services business,
which it refers to as "circle.com," and the SNC stock is intended to track the
separate performance of the remaining businesses of the Company and a retained
interest in circle.com, which it refers to as "SNC." Each share of existing
common stock of the Company will be converted into one share of SNC stock and
.25 of a share of circle.com stock.

The SNC stock and the circle.com stock constitute common stock of the
Company, and the issuance of these classes of stock will not result in any
transfer of assets or liabilities of the Company or any of its affiliates. The
Company intends to issue 80% of the equity value attributed to circle.com. The
remaining equity value attributed to circle.com will remain with SNC as its
"retained interest" in circle.com.

Basis of Presentation

Throughout 1998 and 1997, the Company completed acquisitions that were
accounted for as poolings of interests for financial reporting purposes. The
accompanying consolidated financial statements have been retroactively restated
to reflect the pooling of interests transactions. During 1998 and 1997, the
Company

F-9
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

also made several acquisitions that have been accounted for as purchase
business combinations. The entities with which the Company has entered into
mergers accounted for as poolings of interests for financial reporting purposes
will be collectively referred to as the "Pooled Entities," and their mergers
will be referred to herein as the "Acquisitions." The accompanying consolidated
financial statements have been retroactively restated to reflect the combined
financial position and combined results of operations and cash flows of the
Company and the Pooled Entities, after elimination of all significant
intercompany transactions, for all periods presented, giving effect to the
Acquisitions as if they had occurred at the beginning of the earliest period
presented. Prior to its merger with the Company in July 1997, American List
Corporation utilized a February 28 fiscal year end. Concurrent with the merger,
American List Corporation changed its fiscal year end to December 31. The
accompanying consolidated statements of income, equity and comprehensive income
and cash flows for the year ended December 31, 1996 reflect the combination of
the American List Corporation statements of income, equity and comprehensive
income and cash flows for the year ended February 28, 1997. Certain amounts
previously presented have been reclassified to conform to the December 31, 1998
presentation. The consolidated balance sheets for all periods presented give
effect to the conversion of the shares of the Pooled Entities' common stock
into 19,643,112 shares of the Company's common stock.

Discontinued Operations

The Company's consolidated financial statements have been restated to reflect
the net assets and operating results of the healthcare services business as
discontinued operations pending disposition (see Note 16). The net current and
long-term assets (liabilities) of the healthcare services business have been
separately presented in the accompanying consolidated balance sheet for all
periods presented. The healthcare services operating results are reflected in
the accompanying consolidated statement of income as income (loss) from
discontinued operations for all periods presented. The accompanying notes,
except Note 16, relate only to the continuing operations of the Company.

Business

The Company provides fully integrated marketing solutions for its clients and
characterizes its service offerings into two types: direct marketing,
advertising and communications services and Internet professional services. The
direct marketing, advertising and communications services are provided by SNC
through its BrannWorldwide, Bounty SCA Worldwide and Arnold Communications
networks. The Internet professional services are provided by circle.com. During
1998 and 1997, the Company issued 8,604,293 and 10,414,888 shares,
respectively, in pooling of interests transactions with companies in the direct
marketing, advertising and communications industry. Of the total shares issued
in pooling of interests transactions, 6,545,928 were to companies that operate
through BrannWorldwide, 8,983,714 were to companies that operate through Bounty
SCA Worldwide and 3,489,539 were to companies that operate through Arnold
Communications. The BrannWorldwide network includes Brann Holdings Limited,
Blau Marketing Technologies, Inc., Response Marketing Group Holdings Limited,
LLC and National Sales Service, Inc. The Bounty SCA Worldwide includes Bounty
Group Holdings Limited, Sampling Corporation of America and Echo Marketing,
Inc. The Arnold Communications network includes Arnold Communications, Inc. and
BDDH Group Plc. The Company's operations are conducted throughout the United
States, the United Kingdom and continental Europe.

F-10
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The following details revenues and net income (loss) from continuing
operations for each of the years ended December 31, 1998, 1997 and 1996, as
well as the three months ended March 31, 1999 and March 31, 1998, of the
Company and the Pooled Entities through the dates of their respective
Acquisitions:

<TABLE>
<CAPTION>
For the Three
Months Ended March For the Years Ended
31, December 31,
------------------ ----------------------------
1999 1998 1998 1997 1996
--------- -------- -------- -------- --------
(in thousands)
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues:
The Company................ $ 138,081 $ 63,025 $402,688 $160,783 $ 82,840
Pooled Entities............ -- 46,559 91,115 242,289 266,383
--------- -------- -------- -------- --------
$ 138,081 $109,584 $493,803 $403,072 $349,223
========= ======== ======== ======== ========
Net income (loss) from
continuing operations:
The Company................ $ 13,826 $ (2,326) $ 32,206 $ 5,589 $ 8,193
Pooled Entities............ -- (2,250) (10,846) (22,225) 7,288
--------- -------- -------- -------- --------
$ 13,826 $ (4,576) $ 21,360 $(16,636) $ 15,481
========= ======== ======== ======== ========
</TABLE>

Unaudited Pro Forma Information

During the three months ended March 31, 1999, the Company recorded $0.7
million of nonrecurring acquisition and related costs. Consolidated income from
continuing operations adjusted to exclude acquisition and related costs was
$14.4 million for the three months ended March 31, 1999.

During the three months ended March 31, 1998, the Company recorded $22.8
million of nonrecurring costs, consisting of acquisition and related costs and
compensation to stockholders. Consolidated income from continuing operations
adjusted to exclude nonrecurring acquisition and related costs and compensation
to stockholders was $9.3 million for the three months ended March 31, 1998.

During the year ended December 31, 1998, the Company recorded $39.5 million
of nonrecurring costs, consisting of acquisition and related costs and
compensation to stockholders. Consolidated income from continuing operations
adjusted to exclude nonrecurring acquisition and related costs and compensation
to stockholders was $48.6 million for the year ended December 31, 1998.

During the year ended December 31, 1997, the Company recorded $49.2 million
of nonrecurring costs, consisting of acquisition and related costs, ESOP
expense and compensation to stockholders. Consolidated income from continuing
operations adjusted to exclude nonrecurring acquisition and related costs, ESOP
expense and compensation to stockholders was $21.4 million for the year ended
December 31, 1997.

During the year ended December 31, 1996, the Company recorded $11.5 million
of nonrecurring costs, consisting of ESOP expense and compensation to
stockholders. Consolidated income from continuing operations adjusted to
exclude ESOP expense and compensation to stockholders was $17.8 million for the
year ended December 31, 1996.

Unaudited Interim Financial Statements

The accompanying unaudited consolidated balance sheet as of March 31, 1999
and the consolidated statements of income and cash flows for the three months
ended March 31, 1999 and March 31, 1998 have been prepared by the Company
without audit. Certain information and footnote disclosures normally included
in financial statements presented in accordance with generally accepted
accounting principles have been

F-11
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

omitted. During the first quarter of 1999, the Company issued 3,053,772 shares
of its common stock in conjunction with the acquisitions of PromoTech Research
Associates ("PromoTech") and Media Syndication Global ("MSG"). PromoTech, as a
part of Healthcare, is included in the Company's discontinued operations. These
acquisitions were originally accounted for as pooling of interest transactions.
However, as a result of the June 1999 decision by the Company to distribute its
healthcare services business to its existing stockholders, the first quarter
1999 results have been restated to reflect the PromoTech and MSG acquisitions
as purchases. The Company believes the disclosures made are adequate to make
the information presented not misleading. In the opinion of the Company, the
accompanying unaudited consolidated financial statements reflect all
adjustments, including only normal recurring adjustments, necessary to present
fairly the financial position of the Company at March 31, 1999 and the results
of operations and cash flows for the three months ended March 31, 1999 and
March 31, 1998.

Business Considerations

There are important risks associated with the Company's business and
financial results. These risks include (i) the Company's reliance on a
significant client (see Note 2); (ii) the Company's ability to sustain and
manage future growth; (iii) the Company's ability to manage and successfully
integrate the businesses it has acquired and may acquire in the future; (iv)
the Company's ability to successfully manage its international operations;
(v) the potential adverse effects of fluctuations in foreign exchange rates;
(vi) the Company's dependence on industry trends toward outsourcing of
marketing services; (vii) the risks associated with the Company's reliance on
technology and the risk of business interruption resulting from a temporary or
permanent loss of such technology; (viii) the entrance of new competitors with
greater resources than the Company; (ix) the Company's ability to recruit and
retain qualified personnel; and (x) the dependence of the Company's success on
its executive officers and other key employees, in particular, its Chairman of
the Board of Directors and Chief Executive Officer.

2. Significant Client:

The Company had one client that represented 10.4% of the Company's total
revenues for the year ended December 31, 1998, and one client that represented
15.6% and 14.4% of the Company's total revenues for the years ended December
31, 1997 and 1996, respectively.

3. Summary of Significant Accounting Policies:

Cash and Equivalents

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

Marketable Securities

The Company's investments are classified into two categories. Those
securities classified as "available-for-sale" are reported at market value.
Debt securities consisting of state and municipal bonds are classified as
"held-to-maturity" and are reported at amortized cost. Cost is determined using
the specific identification method. Unrealized gains and losses from securities
"available-for-sale" are reported as a separate component of equity and
comprehensive income.

Receivables From Pass-Through Costs

Receivables from pass-through costs relate to services purchased from third
parties, on behalf of clients, for which no revenue is recorded.

F-12
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Property and Equipment

Property and equipment is stated at cost. The Company depreciates furniture,
fixtures and office and telephone equipment on a straight-line basis over three
to ten years; computer equipment over two to four years and buildings over
forty years. Leasehold improvements are amortized on a straight-line basis over
the shorter of the term of the lease or the estimated useful lives of the
improvements.

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

Revenue Recognition

SNC--The Company provides direct marketing, advertising and communications
services for its clients, including database management, creative design,
direct response marketing, WallBoard(R) information displays, sampling
programs, print production, field sales, teleservices, advertising, public
relations and media placements. Revenues are recognized as services are
rendered in accordance with the terms of the contracts. Certain of these
contracts provide for payments based on accepted customers and the type of
service purchased by the customer. Revenues related to these sales are
recognized on the date the application for service is accepted by the Company's
clients. At this point, the Company has no further performance obligation
related to the submitted customer and is contractually entitled to payment.
Revenues from the sale of lists are recognized upon the shipment to customers
of lists on computerized labels, magnetic tape or computer diskettes for a one-
time usage. Additional billings are made by the Company for additional usage by
the customers. Certain of the contracts include media, postage and other pass-
through costs purchased by the Company on behalf of its clients. For these
contracts, the Company records as revenue the net billings to its clients.

circle.com--Revenues from Internet professional services are recognized based
on the nature of the contract. Revenues from fixed price contracts are
recognized using the percentage-of-completion method based on the ratio of
costs incurred to total estimated costs. Revenue from time-and-materials
contracts are recognized as time and expenses are incurred. Provisions for
estimated losses on uncompleted contracts are made in the period in which such
losses are determined.

Unbilled receivables represent amounts due from customers for services
performed but not yet billed. Unearned revenue represents revenue collected in
advance that is not earned and will be recognized in future periods as it is
earned through the performance of services. Client advances represent deposits
or funds received in advance from clients for payments to be made to third
parties on behalf of clients.

Goodwill and Other Intangible Assets

Goodwill equal to the fair value of consideration paid in excess of the fair
value of net assets purchased has been recorded in conjunction with several of
the Company's purchase business combinations and is being amortized on a
straight-line basis over periods of four to thirty years.

The costs of customer lists that were acquired in conjunction with certain of
the Company's purchase business combinations are amortized on a straight-line
basis over seven years. The contractual covenants are amortized over the term
of the related agreements, which is two to five years.

Costs of purchased lists are amortized on a straight-line basis over their
estimated useful lives, generally one to five years. The Company determines the
useful lives of its lists based upon the estimated period of time such lists
are marketable. The Company periodically reviews the marketability of its lists
and, accordingly, their respective estimated useful lives.

F-13
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The costs of licenses to use, reproduce and distribute lists are amortized on
a straight-line basis over the term of the related license agreement.

When conditions or events occur that management believes might indicate that
the goodwill or any other intangible asset is impaired, an analysis of
estimated future undiscounted cash flows is undertaken to determine if any
write down in the carrying value of the asset is required.

Income Taxes

Prior to their merger with the Company, certain of the U.S.-based Pooled
Entities were treated as S corporations or limited liability companies for
income tax purposes. Accordingly, no provision for federal or state income
taxes, except in certain states that do not recognize S corporations or limited
liability companies, has been made for these entities through the date of their
mergers with the Company in the accompanying consolidated financial statements.

The Company's subsidiaries with operations in the U.K. and continental Europe
pay taxes in their respective countries, on a corporate level similar to a C
corporation in the U.S.

Effective January 1, 1996, SMS elected to be taxed as an S corporation under
the Internal Revenue Code. In lieu of corporate taxes, the stockholders of an S
corporation are taxed on their proportionate share of the Company's taxable
income. Effective with the Reorganization, the Company is treated as a C
corporation for federal and state income tax purposes. At the date of the
Reorganization, the Company recognized a net deferred tax asset and an
associated tax benefit equal to the cumulative net deductible temporary
differences existing at that date. The income tax provision recorded for the
year ended December 31, 1996 includes a provision for income taxes for the
Company for the period from September 24, 1996, the date of the Reorganization,
through December 31, 1996, offset by the net deductible temporary differences
existing at the date of the Reorganization.

The accompanying consolidated financial statements reflect no provision for
federal or state income taxes related to income earned by the Partnership prior
to the Reorganization since each of the partners of the Partnership reflected
their share of the Partnership's net income on their respective tax returns.

Unaudited Pro Forma Income (Loss) Data

The unaudited pro forma net income (loss) amounts include a provision for
federal and state income taxes as if the Company had been a taxable C
corporation for all periods presented. The shares used in computing pro forma
net income (loss) per share assume that the Reorganization and the Acquisitions
had occurred at the beginning of each of the periods presented, reflect the
issuance of additional shares as a result of issuances of stock, the exercise
of stock options, and the repurchase of outstanding shares by certain
subsidiaries of the Company prior to their mergers with the Company. The pro
forma income tax rate on the Company's recurring operations reflects the
combined federal, state and foreign income taxes of approximately 36.3%, 39.8%
and 43.9%, for the years ended December 31, 1998, 1997 and 1996, respectively.
The pro forma income tax rates in the table below differ from the pro forma
income tax rates on the Company's recurring operations due to the
nondeductibility of certain of the acquisition and related costs.

F-14
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The table below presents this pro forma calculation of net income (loss):

<TABLE>
<CAPTION>
For the Three
Months Ended For the Years Ended
March 31, December 31,
----------------- ---------------------------
1999 1998 1998 1997 1996
------- -------- -------- -------- -------
(in thousands)
<S> <C> <C> <C> <C> <C>
Pro forma net income (loss)
data (unaudited):
Historical income (loss) from
continuing operations before
income taxes................. $22,658 $ (8,220) $ 36,832 $(13,654) $20,219
Pro forma benefit (provision)
for income taxes............. (8,832) 1,648 (18,133) (5,537) (8,821)
------- -------- -------- -------- -------
Pro forma income (loss) from
continuing operations........ 13,826 (6,572) 18,699 (19,191) 11,398
Discontinued operations, less
applicable pro forma income
taxes of $(3,309), $(1,955),
$(12,849), $(3,309) and
$(3,713) for the three-months
ended March 31, 1999 and 1998
and December 31, 1998, 1997
and 1996, respectively....... 5,089 (4,052) 1,446 (11,601) (3,624)
Extraordinary item, less
applicable income taxes of
$806......................... -- -- -- -- (1,216)
------- -------- -------- -------- -------
Pro forma net income (loss)... $18,915 $(10,624) $ 20,145 $(30,792) $ 6,558
======= ======== ======== ======== =======
</TABLE>

Accounting for Stock Options

The Company accounts for its stock-based compensation plan using the
intrinsic value based method in accordance with the provisions of APB Opinion
No. 25, "Accounting for Stock Issued to Employees." Pro forma disclosure of net
income and earnings per share, calculated as if the Company accounted for its
stock-based compensation plan using the fair value based method in accordance
with the provisions of Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("SFAS No. 123"), is included in Note
13.

Foreign Currency Translations

Assets and liabilities of the Company's international subsidiaries are
translated using the exchange rate in effect at the balance sheet date. Revenue
and expense accounts for these subsidiaries are translated using the average
exchange rate during the period. Foreign currency translation adjustments are
disclosed as a separate component of equity and comprehensive income.

Estimates and Assumptions

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

Fair Value of Financial Instruments

F-15
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

relatively short maturity of these instruments. As a result of the related
party nature of the majority of the Company's outstanding borrowings at
December 31, 1998 and 1997, and the fact that substantially all borrowings from
third parties were secured by the previously independent Pooled Entities that
had capital structures different than the Company's, it is impracticable to
estimate the fair value of the debt outstanding at these dates.

Concentration of Credit Risk

Concentration of credit risk is limited to cash and equivalents, marketable
securities, accounts receivable and unbilled services. The Company places its
investments in highly rated financial institutions, U.S. Treasury bills,
investment grade short-term debt instruments and state and local
municipalities, while limiting the amount of credit exposure to any one entity.
The Company's receivables are concentrated with customers in the
telecommunications and consumer packaged goods industries. The Company does not
require collateral or other security to support clients' receivables.

New Accounting Pronouncements

During 1997, the Company adopted Statement of Financial Accounting Standards
No. 128, "Earnings Per Share" ("SFAS No. 128") and has applied its provisions
to all periods presented in these financial statements. SFAS No. 128 requires
primary earnings per share ("EPS") to be replaced with basic EPS. Basic EPS is
computed by dividing reported earnings available to common stockholders by the
weighted average number of shares outstanding without consideration of common
stock equivalents or other potentially dilutive securities. Diluted EPS gives
effect to common stock equivalents and other potentially dilutive securities
outstanding during the period.

During 1998, the Company adopted Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income" ("SFAS No. 130"), and the
accompanying consolidated financial statements have been restated to conform to
the SFAS No. 130 requirements. Included within accumulated other comprehensive
income are the cumulative amounts for foreign currency translation adjustments
and unrealized gains and losses on marketable securities. The cumulative
foreign currency translation adjustment was $(1.7) million, $1.8 million and
$0.6 million as of March 31, 1999, December 31, 1998 and 1997, respectively.
The cumulative unrealized gain on marketable securities was $0, $11,000 and
$64,000 as of March 31, 1999, December 31, 1998 and 1997, respectively.

During 1998, the Company adopted Statement of Financial Accounting Standards
No. 131, "Disclosures About Segments of an Enterprise and Related Information"
("SFAS No. 131"). The disclosures required by SFAS No. 131 are disclosed in
Note 20. SNC's networks provide services used to develop and deliver messages
to both broad and targeted audiences through a wide range of communications
channels. The operations within SNC's networks exhibit similar economic
characteristics driven from their consistent efforts to build brands and
increase market penetration for their clients. These operations are reported as
one operating segment. Circle.com provides Internet professional services. The
circle.com stock is intended to separately track the performance of circle.com.
Therefore, circle.com is reported as an operating segment.

During 1998, the Company adopted Statement of Financial Accounting Standards
No. 132, "Employers' Disclosures about Pensions and Other Postretirement
Benefits" ("SFAS No. 132"). The disclosures required by SFAS No. 132 are
provided in Note 14.

F-16
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

4. Marketable Securities:

The amortized cost, unrealized gains and losses, and market values of the
Company's held-to-maturity and available-for-sale securities are summarized as
follows (in thousands):

<TABLE>
<CAPTION>
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ------
<S> <C> <C> <C> <C>
December 31, 1998
Held to maturity, maturing in less
than one year:
State and municipal bonds....... $ 6 $ -- $ -- $ 6
==== ===== ===== ====
Available for sale:
Equity securities............... $105 $ -- $ (15) $ 90
Government income securities.... 555 -- (39) 516
---- ----- ----- ----
$660 $ -- $ (54) $606
==== ===== ===== ====
December 31, 1997
Held to maturity, maturing in less
than one year:
State and municipal bonds....... $664 $ -- $ -- $664
==== ===== ===== ====
Available for sale:
Equity securities............... $ 83 $ 7 $ -- $ 90
Municipal tax-exempt bonds...... 483 4 487
---- ----- ----- ----
$566 $ 11 $ -- $577
==== ===== ===== ====
</TABLE>

5. Property and Equipment:

Property and equipment consist of the following:

<TABLE>
<CAPTION>
As of December
31,
------------------
1998 1997
-------- --------
(in thousands)
<S> <C> <C>
Buildings and leasehold improvements..................... $ 49,870 $ 23,885
Computers and equipment.................................. 55,253 41,709
Furniture and fixtures................................... 12,999 12,543
-------- --------
118,122 78,137
Accumulated depreciation................................. (47,755) (36,886)
-------- --------
$ 70,367 $ 41,251
======== ========
</TABLE>

Depreciation expense totaled $12.8 million, $10.5 million and $9.8 million in
1998, 1997 and 1996, respectively.

F-17
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

6. Goodwill and Other Intangible Assets:

Goodwill and other intangible assets consist of the following:

<TABLE>
<CAPTION>
As of December
31,
------------------
1998 1997
-------- --------
(in thousands)
<S> <C> <C>
Goodwill................................................. $ 68,877 $ 38,468
Unamortized costs of lists............................... 5,674 4,458
License agreements....................................... 2,284 2,000
Customer lists and contractual covenant.................. 9,987 11,558
-------- --------
86,822 56,484
Accumulated amortization................................. (14,534) (13,824)
-------- --------
$ 72,288 $ 42,660
======== ========
</TABLE>

Goodwill arose from purchase acquisitions at certain of the Pooled Entities
prior to their respective mergers with the Company and from the Company's 1998
and 1997 purchase business combinations.

Amortization expense of goodwill and other intangible assets totaled $4.7
million, $3.0 million and $3.1 million in 1998, 1997 and 1996, respectively.

7. Debt:

Long-Term Borrowings

Long-term borrowings consist of the following:
<TABLE>
<CAPTION>
As of December 31,
--------------------
1998 1997
--------- ---------
(in thousands)
<S> <C> <C>
Notes, principally acquisition related, 7%-8%, due
January
2000 and 2002....................................... $ 1,297 $ 1,226
Belgian bank debt, 4.7% weighted average rate, due
various dates
through 2005........................................ 346 --
U.S. bank debt, commercial paper rate plus 2.7%
(approximately 8.55%)............................... -- 2,099
United Kingdom bank debt, base rate plus 2.25%
(approximately 7.25%),
secured by certain assets in the United Kingdom..... -- 460
Obligations under license agreement, 7.25% imputed
rate................................................ 1,058 1,558
Other................................................ -- 300
--------- ---------
2,701 5,643
Current maturities of long-term borrowings........... (1,085) (1,708)
--------- ---------
$1,616 $ 3,935
========= =========
</TABLE>

In addition to the debt listed above, approximately $4.5 million in debt with
a weighted average interest rate of 8.6%, primarily classified as current as of
December 31, 1996, was paid in full during 1997.

Both foreign and domestic term debt from banking and financing institutions
require certain subsidiaries to meet restrictive covenants concerning net worth
and debt service coverage and are secured by the assets of those subsidiaries.

F-18
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Future minimum payments as of December 31, 1998, on long-term borrowings,
excluding capital leases, are as follows (in thousands):

<TABLE>
<S> <C>
1999.................................................................. $1,085
2000.................................................................. 516
2001.................................................................. 531
2002.................................................................. 392
2003.................................................................. 177
------
Total............................................................... $2,701
======
</TABLE>

Related Party Borrowings

Related party borrowings consist of the following:

<TABLE>
<CAPTION>
As of December 31,
-------------------
1998 1997
--------- ---------
(in thousands)
<S> <C> <C>
Note payable, acquisition related, 7%, due September
30, 2002............................................. $ 7,504 $ 3,682
Note payable, acquisition related, 5% for first two
years and 7% during third,
due February 18, 2001................................ 1,420 --
Convertible subordinated debentures payable to
shareholder of acquired
subsidiary, 7%, due September 2000, converted prior
to subsidiary's
merger with the Company.............................. -- 1,651
Shareholder loans of acquired subsidiary, 5.73% to
5.91%................................................ -- 1,571
Note payable to partner of acquired subsidiary, 9.5%.. -- 938
--------- ---------
8,924 7,842
Current maturities of related party borrowings........ -- (770)
--------- ---------
$8,924 $ 7,072
========= =========
</TABLE>

On October 28, 1996, the Company used approximately $7.0 million of cash to
redeem in full the subordinated debentures (the "Debentures") due to related
parties. The Debentures were originally issued on May 18, 1995, with a face
amount of $6.0 million. Cash proceeds of $5.0 million were received upon
issuance of the Debentures. The difference between the cash proceeds received
and the face amount of the Debentures was accounted for as an original issue
discount. The Debentures had a stated interest rate of 12.25% (effective
interest rate to maturity of approximately 17%) and an original maturity date
of December 31, 2001. The $7.0 million payment consisted of the face amount of
the Debentures, a prepayment penalty and accrued interest. A nonrecurring
charge of $1.2 million ($.02 per diluted share), net of an $0.8 million tax
benefit, was recorded at December 31, 1996 as an extraordinary loss related to
this early debt extinguishment. The extraordinary item consists of prepayment
penalties and the write-off of unamortized discount and debt issuance costs.

In addition to the debt listed above, approximately $10.6 million in related
party debt with a weighted average interest rate of 8.3% and with maturities
that extended to 2008 was paid in full during 1997.

F-19
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Lines of Credit

Lines of credit consist of the following:

<TABLE>
<CAPTION>
As of December 31,
-------------------
1998 1997
--------- ---------
(in thousands)
<S> <C> <C>
U.S. bank line of credit, prime rate plus 0.5% (8.25% at
December 31, 1998), $2.3 million maximum borrowing
limit.................................................. $1,825 $1,500
U.S. financial banking institution line of credit, 30-
day commercial paper
rate plus 2.7% (7.94% at December 31, 1997), $5.5
million maximum
borrowing limit........................................ -- 4,537
Related party line of credit from acquired U.S.
subsidiary, prime rate plus 1% (9.5% at December 31,
1997), terminated by the Company in 1998............... -- 3,123
Other borrowings outstanding under credit lines......... -- 15
--------- ---------
$1,825 $ 9,175
========= =========
</TABLE>

The Company maintains various lines of credit with banking and financial
institutions, requiring certain subsidiaries to meet restrictive covenants
concerning net worth and debt service coverage and are secured by the assets of
those subsidiaries. In aggregate, the Company had lines of credit available for
$19.0 million with interest rates ranging from 7.50% to 9.50% at December 31,
1998.

8. Capital Stock:

On May 21, 1998, the Company completed the public offering of 7,068,006
shares of its common stock, par value $0.001 per share, at an offering price of
$42.00 per share. The offering included 500,064 newly issued shares of common
stock sold by the Company and 6,567,942 previously outstanding shares of common
stock sold by selling stockholders. The Company received net proceeds of
approximately $17.3 million from the offering, net of offering costs. The
Company did not receive any proceeds from the sale of shares of common stock in
the offering by the selling stockholders.

On September 24, 1997, the Company completed the public offering of 8,776,334
shares of its common stock, par value $0.001 per share, at an offering price of
$25.8125 per share. The offering included 1,850,000 newly issued shares of
common stock sold by the Company and 6,926,334 previously outstanding shares of
common stock sold by selling stockholders. The Company received net proceeds of
approximately $42.7 million from the offering, net of offering costs. The
Company did not receive any proceeds from the sale of shares of common stock in
the offering by the selling stockholders.

On September 30, 1996, the Company completed an initial public offering of
8,970,000 shares of its common stock, par value $0.001 per share, at an
offering price of $17.00 per share. The offering included 4,038,162 newly
issued shares of common stock sold by the Company and 4,931,838 previously
outstanding shares of common stock sold by selling stockholders. The Company
received net proceeds of approximately $59.2 million from the offering, net of
offering costs. The Company did not receive any proceeds from the sale of
shares of common stock in the offering by the selling stockholders.

F-20
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

9. Income Taxes:

The Company's income tax provision includes the following components:

<TABLE>
<CAPTION>
For the Years Ended
December 31,
--------------------------
1998 1997 1996
------- ------- -------
(in thousands)
<S> <C> <C> <C>
Current:
U.S.--Federal................................ $11,371 $ 4,719 $ 5,282
U.S.--State and city......................... 2,837 2,323 1,214
Foreign...................................... 6,778 2,299 1,267
------- ------- -------
20,986 9,341 7,763
------- ------- -------
Deferred:
U.S.--Federal................................ (5,496) (4,509) (1,953)
U.S.--State and city......................... (1,429) (1,224) (469)
Foreign...................................... 1,411 (626) (603)
------- ------- -------
(5,514) (6,359) (3,025)
------- ------- -------
Income tax provision......................... $15,472 $ 2,982 $ 4,738
======= ======= =======

The provision for taxes on income from continuing operations differs from the
amount computed by applying the U.S. federal income tax rate as a result of the
following:

<CAPTION>
For the Years Ended
December 31,
--------------------------
1998 1997 1996
------- ------- -------
(in thousands)
<S> <C> <C> <C>
Taxes at statutory U.S. federal income tax
rate.......................................... 35.00% 35.00% 35.00%
Income taxed directly to owners................ (7.22) 18.11 (34.18)
State and city income taxes, net of federal tax
benefit....................................... 4.11 (9.76) 5.04
Tax effect of Reorganization................... -- -- (3.19)
Foreign tax rate differential.................. (9.36) 10.28 0.22
Dividends on mandatorily redeemable preferred
stock......................................... -- (1.23) 0.90
Goodwill amortization.......................... 0.76 (1.04) 0.66
Acquisition costs and other permanent
differences................................... 18.72 (73.20) 18.98
------- ------- -------
Effective tax rate............................. 42.01% (21.84)% 23.43%
======= ======= =======
</TABLE>

F-21
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Deferred income taxes are recorded based upon differences between the
financial statement and tax bases of assets and liabilities. As of December 31,
1998 and 1997, temporary differences that give rise to the deferred tax assets
and liabilities consist of the following (in thousands):

<TABLE>
<CAPTION>
As of December
31,
-----------------
1998 1997
-------- -------
<S> <C> <C>
Reserve for doubtful accounts............................. $ 3,778 $ 1,055
Accrued expenses.......................................... 4,349 2,956
Intangible assets......................................... 85,093 --
Deferred compensation..................................... 4,102 3,730
Tax losses of subsidiaries................................ 1,964 1,964
Tax benefit of capital losses............................. 1,202 1,202
Performance revenues...................................... -- 198
Other..................................................... 7,932 527
-------- -------
Gross deferred tax assets................................. 108,420 11,632
-------- -------
Property and equipment.................................... (1,172) (37)
Deferred revenues......................................... (1,180) --
Other..................................................... (2,593) (71)
-------- -------
Gross deferred tax liabilities............................ (4,945) (108)
-------- -------
Valuation allowance....................................... (3,167) (3,167)
-------- -------
Net deferred tax asset.................................... $100,308 $ 8,357
======== =======
</TABLE>

Several of the Company's subsidiaries have capital and operating loss tax
carryforwards that can be realized only if these subsidiaries generate taxable
capital gains or operating income, respectively. At December 31, 1998 and 1997,
management determined that a valuation allowance against the deferred tax asset
associated with these tax losses was required for one of these subsidiaries.
Management continually assesses whether the Company's deferred tax asset is
realizable and believes that the deferred tax asset, net of the valuation
allowance, is realizable at December 31, 1998.

The Company will receive a future benefit arising from the tax treatment of
three of its taxable mergers completed in 1998. In accordance with generally
accepted accounting principles, as a result of the mergers being accounted for
as poolings of interests, the net estimated future tax benefit of approximately
$76.9 million is reflected as a deferred tax asset in the accompanying
consolidated balance sheet as of December 31, 1998, with the offsetting credit
to additional paid-in capital.

At December 31, 1998, cumulative consolidated undistributed earnings of the
Company's foreign subsidiaries were approximately $5.9 million. No provision
for U.S. income taxes or foreign withholding taxes has been made since the
Company considers the undistributed earnings to be permanently invested in the
foreign countries. Determination of the amount of unrecognized deferred tax
liability, if any, for the cumulative undistributed earnings of the foreign
subsidiaries is not practicable since it would depend upon a number of factors
which cannot be known until such time as a decision to repatriate the earnings
is made.

10.Acquisition and Related Costs:

The Company recorded $38.9 million in nonrecurring acquisition and related
costs during 1998. These costs are primarily related to the consummation of
1998 mergers and consist of investment banking fees, expenses associated with
the accelerated vesting of options held by employees of certain of the
Company's acquirees, other professional service fees, transfer taxes and other
contractual payments. In addition, this

F-22
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

amount includes a charge of approximately $2.6 million for costs necessary to
consolidate and integrate certain of the Company's acquired operations in the
U.S. Approximately four locations will be consolidated into two. The Company
expects these integration activities to be substantially complete by the third
quarter of 1999. The charge consists of approximately $1.6 million of severance
and other costs associated with the termination of 42 employees, and $1.0
million of fees incurred for other costs related to these integration
activities. The integration is not expected to result in a headcount reduction.
Most of the terminated employees elected not to relocate and will be replaced.
As of December 31, 1998, no employees had terminated employment with the
Company and $0.3 million had been charged against the total liability.

The Company recorded $31.4 million in nonrecurring acquisition and related
costs during 1997. These costs consist primarily of investment banking fees,
other professional service fees, certain U.K. excise and transfer taxes, as
well as a noncash charge of approximately $9.1 million related to the
accelerated vesting of the options held by employees of one of the Company's
acquirees. The remaining $5.3 million consists of the write-off of deferred
license fees and the accrual of a liability expected to resolve outstanding
litigation. Both the write-off of the deferred fees and the accrual of the
liability were recorded due to changes in fact that resulted from the mergers.

During the three months ended March 31, 1999, the Company recorded $0.7
million in nonrecurring acquisition and related costs. This amount is for costs
necessary to consolidate and integrate certain of the Company's acquired
operations in the U.S. under the Company's plan initiated in the fourth quarter
of 1998. The charge recorded in the first quarter of 1999 consists of
consulting services and other costs related to these integration activities. As
of March 31, 1999, $1.3 million had been charged against the total liability of
$3.3 million.

During the three months ended March 31, 1998, the Company recorded $22.6
million in nonrecurring acquisition and related costs. These costs are
primarily related to the consummation of pooling of interest transactions in
the first quarter of 1998 and consist primarily of investment banking fees,
other professional service fees and other contractual payments.

11. Compensation to Stockholders:

Prior to their merger with the Company, certain stockholders of the acquired
companies received annual compensation in their roles as managers in excess of
amounts that they will receive pursuant to employment agreements they have
entered into with the Company. The amount by which the historical compensation
paid to these managers exceeds that provided in their employment contracts has
been classified as compensation to stockholders in the accompanying
consolidated statement of income.

12. Employee Stock Ownership Plan:

One of the Company's U.S. subsidiaries sponsors an employee stock ownership
plan ("ESOP") which covers primarily all of its employees who work one thousand
hours or more per plan year. Contributions to the ESOP were made at the
discretion of the subsidiary's Board of Directors and were equal to the ESOP's
debt service less dividends received by the ESOP. In December 1994, the ESOP
acquired 534,800 shares from the former chairman of the subsidiary in exchange
for $0.4 million in cash and a promissory note of $6.0 million. The note was
guaranteed by the subsidiary, secured by the ESOP stock and bore interest,
which was payable monthly at 2.7% over the 30-day commercial paper rate.
Principal payments were due in five annual installments of $1.2 million
commencing January 1, 1996. As of December 31, 1997, the entire amount had been
repaid. In January 1995, the ESOP acquired an additional 176,090 shares at a
cost of $1.9 million. Of this amount, $1.8 million was financed through a
promissory note with the remaining $0.1 million paid in cash. This promissory
note was guaranteed by the subsidiary and its former chairman and was due in 84
monthly installments commencing January 1996 with interest at 2.7% over the 30-
day commercial paper rate. As of December 31, 1997, the entire amount had been
repaid.

F-23
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

All dividends and contributions received by the ESOP were used to pay debt
service for the period which the ESOP was leveraged. As the debt was repaid,
shares were released and allocated to active participants based on the
proportion of debt service paid in the year. The ESOP was accounted for in
accordance with Statement of Position No. 93-6 "Employers' Accounting for
Employee Stock Ownership Plans." Accordingly, the debt of the ESOP was
recorded as debt in the accompanying consolidated balance sheet, and the
shares that had not been allocated to participants were reported as unearned
ESOP compensation in the equity section on the consolidated balance sheet. As
shares were committed to be released, the Company recorded compensation
expense equal to the then current market price of the shares committed to be
released, and the shares were treated as outstanding for earnings-per-share
(EPS) computations. Dividends on allocated ESOP shares were recorded as a
reduction of retained earnings; dividends on unallocated ESOP shares were
recorded as a reduction of debt and accrued interest. ESOP compensation
expense was $5.4 million and $6.6 million for 1997 and 1996, respectively. The
status of ESOP shares as of December 31 is as follows:

<TABLE>
<CAPTION>
As of December
31,
-----------------
1998 1997
-------- -------
<S> <C> <C>
Allocated shares........................................... 710,890 570,590
Shares released for allocation............................. -- 140,300
Shares sold................................................ (301,459) --
-------- -------
Total ESOP shares.......................................... 409,431 710,890
======== =======
</TABLE>

All ESOP shares had been released as of December 31, 1998 and 1997.

Former employees who had terminated employment with the subsidiary prior to
its merger with the Company may, at their option, require the Company to
repurchase their vested shares held by the ESOP for fair value. The balance
necessary to satisfy this repurchase obligation has been classified as
Redeemable ESOP stock in the accompanying consolidated balance sheet with a
like amount shown as a reduction of paid-in capital for each year.

13. Stock Incentive Plan:

Existing Stock Incentive Plan

In September 1996, the Company adopted the 1996 Stock Incentive Plan (in its
current form, the "Stock Option Plan"). The Stock Option Plan authorizes the
Company to grant incentive stock options, nonqualified stock options,
restricted stock awards and stock appreciation rights ("SARs"). Subject to
adjustment, the aggregate number of shares of common stock that may be issued
under the Stock Option Plan upon exercise of options, SARs or in the form of
restricted stock may not exceed 17.5% of the number of shares of common stock
outstanding.

The exercise price of options granted under the Stock Option Plan may not be
less than 100% (110% in the case of an optionee who is a 10% stockholder) of
the fair market value per share of common stock on the date of the option
grant. The vesting and other provisions of the options are determined by the
Company's Board of Directors. All options granted as of December 31, 1998 vest
on or before the fourth anniversary of the date of grant and expire on or
before the tenth anniversary of the date of grant. In October 1998, the
Company repriced 3,526,900 options to the fair market value of the Company's
common stock at the date of repricing.

F-24
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

A summary of the activity within the Stock Option Plan, for the three years
ended December 31, 1998, after giving retroactive effect to the conversion of
the Pooled Entities' options, is as follows:

<TABLE>
<CAPTION>
Options Outstanding
----------------------
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
(in thousands)
Beginning of year................................... 6,963 5,164 970
Granted........................................... 11,340 5,749 4,626
Exercised......................................... (1,012) (1,790) (66)
Forfeited......................................... (5,231) (2,160) (281)
Expired........................................... -- -- (85)
------ ------ ------
End of year......................................... 12,060 6,963 5,164
====== ====== ======
Exercisable at end of year.......................... 2,133 1,281 863
====== ====== ======
<CAPTION>
Weighted Average
Exercise Price
----------------------
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
Beginning of year................................... $22.58 $14.95 $ 4.88
Granted........................................... 31.47 24.11 17.05
Exercised......................................... 20.58 14.10 13.73
Forfeited......................................... 34.73 20.24 15.65
Expired........................................... -- -- 15.79
------ ------ ------
End of year......................................... $26.01 $22.58 $14.95
====== ====== ======
Exercisable at end of year.......................... $19.68 $17.03 $11.07
====== ====== ======
</TABLE>

The following table presents information related to options outstanding at
December 31, 1998.

<TABLE>
<CAPTION>
Weighted
Average
Number of Exercise Contractual
Company Options Issued By Options Price Life in Years
------------------------- -------------- ------------- -------------
(in thousands)
<S> <C> <C> <C>
The Company prior to initial
public offering................ 1,031 $17.00 7.68
The Company subsequent to
initial public offering........ 1,727 $19.38-$25.00 8.28
4,677 $25.01-$30.00 9.35
4,013 $30.01-$43.81 9.13
Pooled Entities................. 612 $ 0.01-$29.59 7.29
------
12,060
======
</TABLE>

The fair value of each option grant is estimated on the date of grant using
a Black-Scholes option pricing model with the following weighted average
assumptions used for grants in 1998 and 1997: risk-free interest rate of 5.1%
and 6.2%, expected dividend yield of zero, expected life of 5 years and
expected volatility of 51% and 48%.

The weighted average option fair value on the grant date was $20.60 for
options issued during the year ended December 31, 1998.

If the Company had recorded compensation expense using the fair value based
method prescribed by SFAS No. 123, the Company's 1998 and 1997 pro forma net
income (loss) and 1998 and 1997 pro forma net income (loss) per share amounts,
which reflect a pro forma adjustment for income taxes, would have been reduced
to the following as adjusted amounts:

F-25
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
As of December 31,
-------------------------
1998 1997
------------ ------------
(in thousands except per
share data, unaudited)
<S> <C> <C>
Pro forma net income (loss):
As reported.................................... $ 20,145 $ (30,792)
As adjusted.................................... (13,926) (44,856)
Pro forma basic net income (loss) per share:.....
As reported.................................... 0.29 (0.48)
As adjusted.................................... (0.20) (0.70)
Pro forma diluted net income (loss) per share:
As reported.................................... 0.28 (0.48)
As adjusted.................................... (0.20) (0.70)
</TABLE>

Amended and Restated Stock Incentive Plan

Upon approval by the stockholders, the Second Amended and Restated Stock
Incentive Plan (the "Amended Stock Plan") will become effective upon
implementation of the Recapitalization Proposal. The Amended Stock Plan
authorizes the Company to grant incentive stock options, nonqualified stock
options, restricted stock awards and SARS based on circle.com stock and SNC
stock.

If the Recapitalization and related stock incentive plan proposal are
approved and implemented, outstanding awards previously granted under the stock
incentive plan based upon shares of existing Snyder common stock will be
adjusted so that each holder of an outstanding award will receive a
corresponding award based upon shares of SNC stock and circle.com stock. Each
outstanding option to purchase a share of existing common stock held by a
circle.com employee will be converted into an option to purchase shares of
circle.com stock. Each outstanding option to purchase a share of existing
common stock held by an SNC employee will be converted into an option to
purchase shares of SNC stock. Each outstanding option held by directors and
certain corporate level officers and employees will be converted into an option
to purchase shares of SNC stock and circle.com stock. In each case, the
exercise price of such options will be adjusted in order to maintain the
economic position of option holders upon implementation of the Recapitalization
Proposal. The aggregate intrinsic value of the options outstanding and the
ratio of the exercise price per option to the market value per share will not
change.

14. Pension and Profit-Sharing Plans:

One of the Company's subsidiaries in the U.K. operates a retirement benefit
plan, which is a funded defined benefit plan available to all employees. The
assets of the plan are held separately from those of the subsidiary and are
invested in managed funds principally comprised of equity securities. Plan
benefits are based on years of service and compensation levels at the time of
retirement. The funding of the plan is determined following consultation with
actuaries using the projected unit credit method.

For purposes of these consolidated financial statements, the actuarial value
of the plan's liabilities has been estimated using the available actuarial
valuations, and the plan's asset values reflect the actual market value of
those assets at each balance sheet date based on records maintained by the
plan's trustees. The most recent actuarial update of the plan's liabilities was
performed as of December 31, 1998. The significant assumptions used and the
funded status of the plan are set out in the tables below.
<TABLE>
<CAPTION>
Significant
Assumptions
----------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Discount rate.............................................. 5.5% 6.75% 8.0%
Expected long-term rate of return on plan assets........... 8.5 7.75 9.0
Rate of increase in compensation........................... 4.0 5.25 6.0
</TABLE>

F-26
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Net Periodic Pension Cost

Net periodic pension cost is determined using the assumptions as of the
beginning of the year and is comprised of the following:

<TABLE>
<CAPTION>
For the Years
Ended December 31,
-------------------------------
1998 1997 1996
------- -------------- -------
(in thousands)
<S> <C> <C> <C>
Service cost............................... $ 1,375 $ 1,360 $ 1,109
Interest cost on projected benefit
obligation................................ 1,177 1,065 875
Expected return on plan assets............. (1,392) (2,899) (1,078)
Net amortization of unrecognized net loss
and deferral of
actual return on plan assets.............. -- 1,638 125
------- ------- -------
Net periodic pension cost.................. $ 1,160 $ 1,164 $ 1,031
======= ======= =======
</TABLE>

Funded Status

The funded status is determined using the assumption as of the end of the
year and is reflected as follows:

<TABLE>
<CAPTION>
As of December
31,
----------------
1998 1997
------- -------
(in thousands)
<S> <C> <C>
Change in benefit obligation:
Benefit obligation at beginning of year.................... $17,502 $13,931
Service cost............................................... 1,375 1,360
Interest cost.............................................. 1,177 1,065
Plan participants' contributions........................... 646 590
Actuarial gain............................................. 1,143 1,195
Benefits paid.............................................. (464) (639)
------- -------
Benefit obligation at end of year.......................... $21,379 $17,502
======= =======
Change in plan assets:
Fair value of plan assets at beginning of year............. $17,321 $13,777
Actual return on plan assets............................... 2,913 2,430
Employee contribution...................................... 646 590
Employer contribution...................................... 1,342 1,163
Benefits paid.............................................. (464) (639)
------- -------
Fair value of plan assets at end of year................... $21,758 $17,321
======= =======
</TABLE>

The Company and certain of its subsidiaries maintain defined contribution
benefit plans. Pension and profit sharing costs related to these plans amounted
to approximately $1.6 million, $1.2 million, and $1.0 million for 1998, 1997
and 1996, respectively.

15. Net Income Per Share:

A reconciliation of the shares used to compute basic and diluted earnings per
share follows. For each of the years presented, the same net income used to
compute basic earnings per share was used to compute diluted earnings per
share.

F-27
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
For the
Three Months For the Years Ended December
Ended March 31, 31,
--------------- ----------------------------
1999 1998 1998 1997 1996
------- ------- -------------- ------ ------
(in thousands)
(unaudited)
<S> <C> <C> <C> <C> <C>
Weighted average shares
outstanding for the period
used in computation of basic net
income per share................. 71,889 67,747 69,587 63,752 59,194
Diluted impact of stock options
and other dilutive securities.... 1,814 -- 2,425 -- 798
------- ------- ------ ------ ------
Shares used in computation of
diluted net income per share..... 73,703 67,747 72,012 63,752 59,992
======= ======= ====== ====== ======
</TABLE>

For the three months ended March 31, 1999 and 1998 and the years ended
December 31, 1998 and 1997, there existed weighted average common stock
equivalents of 40,700, 2,558,409, 542,897 and 1,807,903, respectively, which
are not included in the calculation of diluted net income per share because
they were antidilutive for the period.

16. Discontinued Operations:

Snyder Healthcare Services, Inc.

On June 22, 1999, the Company's Board of Directors approved a plan to effect
the Distribution of 100% of the common shares of a newly formed wholly owned
subsidiary, Snyder Healthcare Services, Inc. ("Healthcare"), to the Company's
common stockholders of record at the close of business on a date to be
determined (the "Spin-off"). Common shares will be distributed on the basis of
one share of Healthcare for every two shares of the Company's existing common
stock. Following the distribution, Healthcare will become an independent,
publicly traded corporation. Accordingly, the results of Healthcare have been
reclassified from amounts previously reported, and are stated separately in the
consolidated financial statements as discontinued operations pending
disposition. Summarized financial information of the discontinued Healthcare
operations is presented in the following tables:

Earnings from discontinued Healthcare operations included in the Consolidated
Statement of Income are as follows (in thousands):

<TABLE>
<CAPTION>
For the Three Months For the Years Ended
Ended March 31, December 31,
---------------------- ----------------------------
1999 1998 1998 1997 1996
---------- ---------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues................ $ 86,939 $ 67,356 $321,500 $208,967 $144,704
Operating expenses:
Cost of services...... 66,856 49,163 236,047 156,346 104,922
Selling, general and
administrative
expenses............. 10,346 8,415 43,029 32,787 25,960
Compensation to
stockholders......... -- 236 742 15,638 12,340
Recapitalization
costs................ -- -- -- 1,889 --
Acquisition and
related costs........ 1,576 11,356 26,922 8,042 --
---------- ---------- -------- -------- --------
Income (loss) from
operations............. 8,161 (1,814) 14,760 (5,735) 1,482
Interest income
(expense), net......... 237 (283) (465) (1,049) 105
---------- ---------- -------- -------- --------
Income (loss) from
operations before
income taxes........... 8,398 (2,097) 14,295 (6,784) 1,587
Income tax provision.... (3,309) (1,955) (12,849) (1,934) (1,504)
---------- ---------- -------- -------- --------
Net income (loss)....... $ 5,089 $ (4,052) $ 1,446 $ (8,718) $ 83
========== ========== ======== ======== ========
</TABLE>

F-28
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The components of net assets (liabilities) of discontinued Healthcare
operations included in the Consolidated Balance Sheet are as follows (in
thousands):
<TABLE>
<CAPTION>
March 31, December 31,
----------- ----------------
1999 1998 1997
----------- -------- -------
(unaudited)
<S> <C> <C> <C>
Cash and equivalents.............................. $ 24,288 $ 25,664 $18,040
Accounts receivable, net.......................... 50,700 43,521 29,331
Unbilled services................................. 24,183 15,212 6,769
Other............................................. 11,530 11,052 9,101
-------- -------- -------
Total current assets............................ 110,701 95,449 63,241
-------- -------- -------
Lines of credit................................... 633 198 22,875
Accounts payable and accrued expenses............. 59,670 60,393 49,274
Unearned revenue.................................. 9,564 8,446 14,125
Other............................................. 7,240 1,965 137
-------- -------- -------
Total current liabilities....................... 77,107 71,002 86,411
-------- -------- -------
Net current assets (liabilities)................ 33,594 24,447 (23,170)
-------- -------- -------
Property and equipment, net....................... 11,754 10,028 4,880
Goodwill and other intangibles.................... 97,335 80,728 26,283
Other............................................. 4,461 7,439 6,543
-------- -------- -------
Total long-term assets.......................... 113,550 98,195 37,706
Total long-term liabilities..................... 1,339 2,915 4,165
-------- -------- -------
Net long-term assets............................ 112,211 95,280 33,541
-------- -------- -------
Total net assets of discontinued operations..... $145,805 $119,727 $10,371
======== ======== =======
</TABLE>

The cash flow provided by (used in) discontinued Healthcare operations was as
follows (in thousands):

<TABLE>
<CAPTION>
For the Three Months For the Years Ended
Ended March 31, December 31,
---------------------- --------------------------
1999 1998 1998 1997 1996
---------- ---------- -------- ------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Operating activities of
discontinued operations:
Income (loss) from
discontinued operations... $ 5,089 $ (4,052) $ 1,446 $(8,718) $ 83
Adjustments to reconcile
income (loss) from
discontinued operations to
net cash provided by (used
in) operating activities.. 1,850 3,338 9,133 (2,308) 325
Net change in assets and
liabilities............... (12,505) (2,225) (11,800) 9,102 510
---------- --------- -------- ------- -------
Net cash provided by (used
in) operating activities.. (5,566) (2,939) (1,221) (1,924) 918
---------- --------- -------- ------- -------
Net cash used in investing
activities
from discontinued
operations................ (313) (415) (7,190) (3,576) (1,699)
---------- --------- -------- ------- -------
Investments and advances
from Snyder............... 5,754 5,780 42,753 (167) (7,998)
Other financing
activities................ (1,135) (3,742) (26,917) 16,618 (758)
---------- --------- -------- ------- -------
Net cash provided by (used
in) financing activities.. 4,619 2,038 15,836 16,451 (8,756)
---------- --------- -------- ------- -------
Net cash provided by (used
in) discontinued
operations before effect
of exchange rate changes
on cash................... (1,260) (1,316) 7,425 10,951 (9,537)
Effect of exchange rate
changes on cash........... (116) (349) 199 (177) 76
---------- --------- -------- ------- -------
Cash flow provided by (used
in) discontinued
operations................ $ (1,376) $ (1,665) $ 7,624 $10,774 $(9,461)
========== ========= ======== ======= =======
</TABLE>
During the year ended December 31, 1998, Healthcare recorded a charge of
approximately $10.7 million for costs necessary to consolidate and integrate
certain of the Company's acquired operations in the U.S., the U.K. and France.
The Company is integrating acquired subsidiaries that provide similar services
within the same geographic regions. Approximately nine locations will be
combined into four, and the efforts will not have a significant impact on the
Company's workforce. The Company expects these integration activities to be
substantially complete by the third quarter of 1999. The charge consists of
approximately $4.1 million to consolidate and terminate lease obligations, $5.3
million of severance and other costs associated with the

F-29
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

termination of 142 employees, and $1.3 million of fees incurred for consulting
services and other costs related to these integration activities. The employees
who were terminated are primarily redundant operations and administrative
personnel, as well as one underutilized sales team in the U.K. As of December
31, 1998, 58 employees had terminated employment with the Company and $2.7
million had been charged against the total liability, including $1.5 million in
severance and related payments.

During the three months ended March 31, 1999, Healthcare recorded $1.6
million in nonrecurring acquisition and related costs. This amount is for
additional costs necessary to consolidate and integrate certain of the
Company's acquired operations in the U.S. and U.K. under the Company's plan
initiated in 1998. The charge recorded in the first quarter of 1999 consists of
$1.3 million in severance and related costs associated with the termination of
23 employees, and $0.3 million in consulting services and other costs related
to these integration activities. As of March 31, 1999, 128 employees had
terminated employment with the Company and $5.7 million had been charged
against the total liability of $12.2 million.

Bob Woolf Associates, Inc.

On October 24, 1997, the Board of Directors of one of the Company's 1998
acquirees approved the spin-off of its sports management operations, which were
carried on by Bob Woolf Associates, Inc. ("BWA"), a wholly owned subsidiary.
The acquiree purchased BWA in May 1996. The spin-off was executed in the form
of a dividend to the acquiree's stockholders of record on October 31, 1997,
whereby each stockholder received one share of BWA for each share of the
acquiree's common stock held.

The net losses of BWA prior to October 31, 1997 are included in the
accompanying consolidated statement of income under "discontinued operations"
and totaled $1.5 million in 1997 and 1996. Revenues from BWA were approximately
$0.3 million for the period from May 1, 1996 (date of BWA acquisition) to
December 31, 1996, and approximately $2.0 million for the ten months ended
October 31, 1997.

17. Leases:

The Company leases certain facilities, office equipment and other assets. The
following is a schedule of future minimum lease payments for capital leases and
for operating leases with initial or remaining terms in excess of one year at
December 31, 1998 (in thousands):

<TABLE>
<CAPTION>
Capital Operating
Years Ending December 31, Leases Leases
------------------------- ------- ---------
<S> <C> <C>
1999...................................................... $2,024 $18,418
2000...................................................... 960 16,338
2001...................................................... 343 14,665
2002...................................................... 301 10,751
2003...................................................... 171 7,364
Thereafter................................................ 5 26,793
------ -------
Total minimum lease payments.............................. 3,804 $94,329
=======
Less: Amount representing interest........................ (376)
------
Total obligation under capital leases..................... 3,428
Less: Current portion..................................... (1,685)
------
Long-term portion......................................... $1,743
======
</TABLE>

Property and equipment, net, on the consolidated balance sheet includes $3.7
million and $3.8 million for equipment purchased under capital leases as of
December 31, 1998 and 1997, respectively.

Rental expense for all operating leases was approximately $18.3 million,
$15.0 million and $15.1 million for the years ended December 31, 1998, 1997 and
1996, respectively.

F-30
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

18. Commitments and Contingencies:

The Company has entered into employment agreements with certain key
executives and consulting agreements with certain former executives that call
for guaranteed minimum salaries and bonuses for varying terms.

One of the Company's U.S. subsidiaries has standby letters of credit with a
bank, secured by compensating balance arrangements, totaling $6.0 million. The
standby letters of credit renew annually and interest is charged at a rate of
1.25% per year.

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

19. Related Parties:

The Company's headquarters office space is leased from a third party, in
which one of the nonemployee directors of the Company has a minority ownership
interest. Rent paid under this lease was $1.1 million, $2.4 million and $1.1
million in 1998, 1997 and 1996, respectively.

The Company produced a WallBoard(R) for which a publication beneficially
owned by certain nonemployee directors of the Company is one of the sponsors.
Revenues earned under this program were $2.0 million in 1997.

In December 1997, the Company entered into a software license agreement with
a company in which certain nonemployee directors of the Company are directors
and in which they own a minority interest. The Company paid approximately $2.5
million for the license and related equipment.

20. Segment Information:

SNC develops and delivers messages to both broad and targeted audiences
through a broad range of communication channels. Circle.com provides Internet
professional services. The circle.com stock is intended to separately track
the performance of circle.com, and circle.com is reported as an operating
segment.

F-31
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

F-32
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

21. Selected Quarterly Financial Data (unaudited, in thousands, except per
share data):

The following table summarizes financial data by quarter for the Company for
1998 and 1997, giving effect to the Acquisitions as if they had occurred at the
beginning of the earliest period presented.

<TABLE>
<CAPTION>
1998 Quarter Ended
-------------------------------------------------------
March 31 June 30 September 30 December 31 Total
--------- --------- ------------ ----------- ---------
<S> <C> <C> <C> <C> <C>
Revenues................ $ 109,584 $ 118,605 $ 129,587 $ 136,027 $ 493,803
Gross profit............ 38,087 40,610 45,021 47,105 170,823
Income (loss) from
continuing operations.. (4,576) 11,124 14,435 377 21,360
Income (loss) from
continuing operations
per share (diluted).... (0.07) 0.16 0.20 0.01 0.30
Income (loss) from
discontinued
operations............. (4,052) 6,670 (3,771) 2,599 1,446
Income (loss) from
discontinued operations
per share (diluted).... (0.06) 0.09 (0.05) 0.04 0.02
Net income (loss)....... (8,628) 17,794 10,664 2,976 22,806
Net income (loss) per
share (diluted) (a).... (0.13) 0.25 0.15 0.04 0.32
Pro forma net income
(loss) from continuing
operations............. (6,572) 10,721 13,953 597 18,699
Pro forma net income
(loss) from continuing
operations per share
(diluted) (a).......... (0.10) 0.15 0.19 0.01 0.26
Pro forma net income
(loss)................. (10,624) 17,391 10,182 3,196 20,145
Pro forma net income
(loss) per share
(diluted) (a).......... (0.16) 0.24 0.14 0.04 0.28
Pro forma income (loss)
from continuing
operations, excluding
nonrecurring
acquisition and related
costs and compensation
to stockholders........ 9,277 10,833 14,194 14,305 48,609
Pro forma income (loss)
from continuing
operations, excluding
nonrecurring
acquisition costs and
compensation to
stockholders per share
(diluted).............. 0.13 0.15 0.20 0.20 0.68
</TABLE>

F-33
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
1997 Quarter Ended
------------------------------------------------------
March 31 June 30 September 30 December 31 Total
-------- --------- ------------ ----------- ---------
<S> <C> <C> <C> <C> <C>
Revenues................ $ 94,275 $ 100,685 $ 101,838 $ 106,274 $ 403,072
Gross profit............ 30,913 33,999 33,215 31,046 129,173
Income (loss) from
continuing operations.. (9,339) 6,466 (7,502) (6,261) (16,636)
Income (loss) from
continuing operations
per share (diluted).... (0.15) 0.10 (0.12) (0.09) (0.26)
Income (loss) from
discontinued
operations............. (336) 2,183 (11,190) (882) (10,225)
Income (loss) from
discontinued operations
per share (diluted)
(a).................... (0.01) 0.03 (0.18) (0.01) (0.16)
Net income (loss)....... (9,675) 8,649 (18,692) (7,143) (26,861)
Net income (loss) per
share (diluted) (a).... (0.16) 0.13 (0.30) (0.11) (0.42)
Pro forma net income
(loss) from continuing
operations............. (10,139) 5,310 (7,966) (6,396) (19,191)
Pro forma net income
(loss) from continuing
operations per share
(diluted) (a).......... (0.16) 0.08 (0.13) (0.10) (0.30)
Pro forma net income
(loss) from
discontinued
operations............. (634) 1,909 (10,449) (2,427) (11,601)
Pro forma net income
(loss) from
discontinued operations
per share (diluted)
(a).................... (0.01) 0.03 (0.17) (0.04) (0.18)
Pro forma net income
(loss)................. (10,773) 7,219 (18,415) (8,823) (30,792)
Pro forma net income
(loss) per share
(diluted) ............. (0.17) 0.11 (0.29) (0.13) (0.48)
Pro forma income (loss)
from continuing
operations, excluding
nonrecurring
acquisition and related
costs, ESOP expense and
compensation to
stockholders........... 5,228 6,463 7,580 2,141 21,412
Pro forma income (loss)
from continuing
operations, excluding
nonrecurring
acquisition and related
costs, ESOP expense and
compensation to
stockholders per share
(diluted) (a).......... 0.08 0.10 0.12 0.03 0.33
</TABLE>

The pro forma amounts include a provision for federal and state income taxes
as if the Company had been a taxable C corporation for all periods presented.

(a) The sum of these amounts does not equal the annual amount because the
quarterly calculations are based on varying numbers of shares outstanding.

F-34
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of
Brann Holdings Limited:

We have audited the consolidated balance sheets of Brann Holdings Limited
(the Company) and its subsidiaries as of December 31, 1995 and 1996, and the
related consolidated statements of income, changes in stockholders' equity and
cash flows for each of the three years in the period ended December 31, 1996
(not presented separately herein). These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards in the United Kingdom, which do not differ in any material respect
from generally accepted auditing standards in the United States. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements audited by us present
fairly, in all material respects, the financial position of the Company and its
subsidiaries as of December 31, 1995 and 1996, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1996 in conformity with generally accepted accounting principles
in the United States.

Price Waterhouse
Chartered Accountants and Registered Auditors

Bristol, England
May 30, 1997

F-35
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
American List Corporation

We have audited the consolidated balance sheet of American List Corporation
and Subsidiaries as of February 28, 1997, and the related consolidated
statements of earnings, stockholders' equity and cash flows for the year then
ended (not presented separately herein). These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements 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 consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of American List
Corporation and Subsidiaries as of February 28, 1997, and the consolidated
results of their operations and their consolidated cash flows for the year then
ended in conformity with generally accepted accounting principles.

Grant Thornton LLP

Melville, New York
April 11, 1997

F-36
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of Snyder Communications, Inc.:

We have audited the accompanying combined balance sheets of SNC, as defined
in Note 1 to the combined financial statements, as of December 31, 1998 and
1997, and the related combined statements of income and cash flows for each of
the years in the three year period ended December 31, 1998. These combined
financial statements are the responsibility of Snyder Communications, Inc.'s
management. Our responsibility is to express an opinion on these combined
financial statements based on our audits. We did not audit the 1996 financial
statements of American List Corporation or Brann Holdings Limited included in
the combined financial statements of SNC, which statements reflect revenues
constituting 19% of the related combined total in 1996. These statements were
audited by other auditors whose reports have been furnished to us, and our
opinion expressed herein, insofar as it relates to the amounts included for
1996 for American List Corporation or Brann Holdings Limited, is based upon the
reports of the other auditors.

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

In our opinion, based on our audits and the reports of the other auditors,
the combined financial statements referred to above present fairly, in all
material respects, the financial position of SNC as of December 31, 1998 and
1997, and the results of their operations and their cash flows for each of the
years in the three year period ended December 31, 1998, in conformity with
generally accepted accounting principles.

SNC is a business unit of Snyder Communications, Inc. whose consolidated
financial statements are presented on pages F-2 through F-34. Reference should
be made to Note 1 of the accompanying combined financial statements.

ARTHUR ANDERSEN LLP

Washington, D.C.
June 22, 1999

F-37
<PAGE>

SNC
(See Note 1)

COMBINED BALANCE SHEET
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
----------- -----------------
1999 1998 1997
----------- -------- --------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents........................... $ 56,404 $ 47,931 $ 71,789
Marketable securities.......................... -- 612 1,241
Accounts receivable, net of allowance for
doubtful accounts
of $5,991, $6,629 and $3,806 at March 31,
1999, December 31, 1998 and 1997,
respectively.................................. 92,333 76,750 67,279
Receivables from pass-through costs............ 95,258 83,164 76,405
Related party receivables...................... 190 190 1,428
Unbilled services.............................. 9,868 19,457 13,960
Current portion of deferred tax asset.......... 12,225 13,549 8,339
Other current assets........................... 17,315 11,285 14,053
Net current assets of discontinued operations.. 33,594 24,447 --
-------- -------- --------
Total current assets......................... 317,187 277,385 254,494
-------- -------- --------
Property and equipment, net...................... 67,469 67,440 40,329
Goodwill and other intangible assets, net........ 134,007 65,863 42,660
Retained interest in circle.com.................. 2,418 2,090 306
Deferred tax asset............................... 86,401 86,637 --
Deposits and other assets........................ 5,493 5,645 8,198
Net long-term assets of discontinued operations.. 112,211 95,280 33,541
-------- -------- --------
Total assets................................. $725,186 $600,340 $379,528
======== ======== ========
LIABILITIES AND INVESTMENTS AND ADVANCES
FROM SNYDER COMMUNICATIONS
Current liabilities:
Lines of credit................................ $ 1,500 $ 1,825 $ 9,175
Current maturities of long-term debt........... 1,063 1,085 2,478
Accrued payroll................................ 14,529 12,337 10,580
Accounts payable............................... 115,413 113,066 98,325
Accrued expenses............................... 93,136 79,050 69,415
Client advances................................ 4,783 11,753 12,675
Unearned revenue............................... 18,440 14,042 16,002
Net current liabilities of discontinued
operations.................................... -- -- 23,170
-------- -------- --------
Total current liabilities.................... 248,864 233,158 241,820
-------- -------- --------
Related party borrowings......................... 8,628 8,924 7,072
Long-term obligations under capital leases....... 1,570 1,743 1,849
Long-term debt, net of current maturities........ 1,440 1,616 3,935
Other liabilities................................ 3,637 2,922 2,538
Commitments and contingencies
Redeemable ESOP stock, 90, 88 and 147 shares
outstanding at
March 31, 1999, December 31, 1998 and 1997,
respectively.................................... 2,425 2,960 5,278
Investments and advances from Snyder
Communications.................................. 458,622 349,017 117,036
-------- -------- --------
Total liabilities and investments and
advances from Snyder Communications ........ $725,186 $600,340 $379,528
======== ======== ========
</TABLE>

The accompanying notes are an integral part of this combined balance sheet.

F-38
<PAGE>

SNC
(See Note 1)

COMBINED STATEMENT OF INCOME
(in thousands, except per share amounts)

<TABLE>
<CAPTION>
For the Three
Months Ended For the Years Ended
March 31, December 31,
------------------ ----------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
Net revenues................. $132,955 $107,841 $480,289 $397,505 $345,915
Operating expenses:
Cost of services........... 87,122 70,174 314,255 270,268 234,526
Selling, general and
administrative expenses... 21,665 23,227 92,071 90,555 75,950
Compensation to
stockholders.............. -- 192 573 12,422 4,939
ESOP expense............... -- -- -- 5,193 6,439
Acquisition and related
costs..................... 709 22,597 38,941 31,389 --
-------- -------- -------- -------- --------
Income (loss) from
operations.................. 23,459 (8,349) 34,449 (12,322) 24,061
Interest expense, including
amounts to related parties
of $84, $148, $541, $1,491
and $2,103 in the three
months ended March 31, 1999
and 1998 and the years ended
December 31, 1998, 1997 and
1996, respectively.......... (286) (441) (1,753) (3,178) (5,385)
Investment income............ 670 898 3,638 2,944 2,371
Income (loss) related to
retained interest in
circle.com.................. (174) (66) -- (26) (48)
-------- -------- -------- -------- --------
Income (loss) from continuing
operations before income
taxes....................... 23,669 (7,958) 36,334 (12,582) 20,999
Income tax provision
(benefit)................... 9,080 (3,672) 14,972 3,940 5,308
-------- -------- -------- -------- --------
Income (loss) from continuing
operations.................. 14,589 (4,286) 21,362 (16,522) 15,691
Income (loss) from
discontinued operations (net
of income taxes)............ 5,089 (4,052) 1,446 (10,225) (1,415)
-------- -------- -------- -------- --------
Income (loss) before
extraordinary item.......... 19,678 (8,338) 22,808 (26,747) 14,276
Extraordinary item, less
applicable income taxes
of $806..................... -- -- -- -- (1,216)
-------- -------- -------- -------- --------
Net income (loss)...... $ 19,678 $ (8,338) $ 22,808 $(26,747) $ 13,060
======== ======== ======== ======== ========
Pro forma historical net
income (loss) per share (See
Note 1):
Basic and diluted net
income (loss) per share:
Continuing operations.... $ 0.19 $ (0.06) $ 0.28 $ (0.22) $ 0.21
Discontinued operations.. 0.07 (0.05) 0.02 (0.13) (0.02)
Extraordinary item....... -- -- -- -- (0.02)
-------- -------- -------- -------- --------
Total basic and diluted net
income (loss) per share... $ 0.26 $ (0.11) $ 0.30 $ (0.35) $ 0.17
======== ======== ======== ======== ========
Pro forma adjusted net income
(loss) per share (unaudited)
(See Note 1 and 3):
Adjusted basic and diluted
net income (loss) per
share:
Continuing operations.... $ 0.19 $ (0.08) $ 0.25 $ (0.24) $ 0.16
Discontinued operations.. 0.07 (0.06) 0.01 (0.16) (0.05)
Extraordinary item....... -- -- -- -- (0.02)
-------- -------- -------- -------- --------
Total basic and diluted net
income (loss) per share... $ 0.26 $ (0.14) $ 0.26 $ (0.40) $ 0.09
======== ======== ======== ======== ========
Shares used in computing
net income (loss) per
share..................... 75,581 75,581 75,581 75,581 75,581
======== ======== ======== ======== ========
</TABLE>

The accompanying notes are an integral part of this combined statement of
income.

F-39
<PAGE>

SNC
(See Note 1)

COMBINED STATEMENT OF CASH FLOWS
(in thousands)

<TABLE>
<CAPTION>
For the Three
Months Ended For the Years Ended
March 31, December 31,
---------------- --------------------------
1999 1998 1998 1997 1996
------- ------- ------- -------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities of continuing
operations:
Income (loss) from continuing
operations.................... $14,589 $(4,286) $21,362 $(16,522) $15,691
Adjustments to reconcile net
income (loss) from continuing
operations to net cash
provided by (used in)
operating activities of
continuing operations:
Depreciation and
amortization................ 4,604 3,576 16,884 13,324 12,786
Loss on repayment of
subordinated debt........... -- -- -- -- 2,021
Noncash charge from
accelerated vesting of
acquired subsidiary
options..................... -- -- 1,862 9,097 --
Noncash ESOP expense......... -- -- -- 4,851 5,282
Deferred taxes............... 2,400 (9,130) (13,223) (7,483) (2,957)
Retained interest in
circle.com.................. 174 66 -- 26 48
Gain/loss on disposal of
assets...................... 41 122 600 3,011 1,029
Other noncash amounts........ (11) 30 (9) 2,114 2,259
Changes in assets and
liabilities:
Accounts receivable, net..... (13,401) (7,868) (510) (25,656) (5,069)
Receivables from pass-through
costs....................... (8,178) (7,361) (7,924) (11,217) (28,557)
Related party receivables.... -- (510) 1,238 776 945
Unbilled services............ 12,506 6,461 (4,584) (3,182) (3,199)
Deposits and other assets.... 194 (315) 2,592 1,046 (532)
Other current assets......... (686) 136 640 1,288 (4,140)
Accrued payroll, accounts
payable and
accrued expenses............ 177 22,273 13,189 45,821 31,589
Client advances.............. (6,971) (7,611) (2,630) -- --
Unearned revenue............. 3,866 (2,647) (2,380) 4,777 8,398
Impact from differing fiscal
year ends................... -- -- -- (2,761) --
------- ------- ------- -------- -------
Net cash provided by (used
in) operating activities of
continuing operations....... 9,304 (7,064) 27,107 19,310 35,594
------- ------- ------- -------- -------
Cash flows from investing
activities of continuing
operations:
Purchase of subsidiaries, net
of cash acquired.............. 1,553 (5,157) (13,772) (22,518) --
Retained interest in
circle.com.................... (502) (508) (1,784) (178) (202)
Purchase of property and
equipment..................... (4,280) (9,024) (33,801) (18,129) (11,184)
Proceeds from sale of
equipment..................... -- -- 7 50 74
Net sales of marketable
securities.................... 612 118 575 5,807 2,052
Purchase of intangible assets.. (577) (199) (1,480) (729) (1,974)
Note and net advances to
stockholders of acquired
subsidiaries.................. -- 276 942 1,467 --
Impact from differing fiscal
year ends..................... -- -- -- (446) --
------- ------- ------- -------- -------
Net cash used in investing
activities of continuing
operations.................... (3,194) (14,494) (49,313) (34,676) (11,234)
------- ------- ------- -------- -------
</TABLE>

The accompanying notes are an integral part of this combined statement of cash
flows.

F-40
<PAGE>

COMBINED STATEMENT OF CASH FLOWS (Continued)
(in thousands)

<TABLE>
<CAPTION>
For the Three
Months Ended For the Years Ended
March 31, December 31,
---------------- -------------------------
1999 1998 1998 1997 1996
------- ------- ------- ------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from financing
activities of continuing
operations:
Repayment of long-term notes
payable to limited
partners and others............ (77) -- (1,740) (29,795) (3,388)
Proceeds from issuance of
subordinated debentures
due to related parties......... -- (424) -- 425 294
Repayment of subordinated
debentures due to related
parties........................ -- -- -- -- (6,900)
Proceeds (repayment) from long-
term debt...................... 517 6,390 (8,723) 5,902 2,450
Proceeds from mandatorily
redeemable preferred stock..... -- -- -- -- 1,091
Net borrowings (repayments) on
lines of credit................ (325) (5,795) (7,595) (1,306) (2,464)
Payments on capital lease
obligations.................... (570) (717) (2,087) (2,102) (1,115)
Investments and advances from
Snyder Communications.......... 8,882 9,026 60,552 41,065 21,518
Impact from differing fiscal
year ends...................... -- -- -- 3,704 --
------- ------- ------- ------- -------
Net cash provided by financing
activities of continued
operations................... 8,427 8,480 40,407 17,893 11,486
------- ------- ------- ------- -------
Effect of exchange rate changes... (310) 261 694 396 1,096
------- ------- ------- ------- -------
Net increase (decrease) in cash
and equivalents of continuing
operations....................... 14,227 (12,817) 18,895 2,923 36,942
Investments and advances (to) from
discontinued operations.......... (5,754) (5,780) (42,753) 167 7,998
Cash and equivalents, beginning of
period........................... 47,931 71,789 71,789 68,699 23,759
------- ------- ------- ------- -------
Cash and equivalents, end of
period........................... $56,404 $53,192 $47,931 $71,789 $68,699
======= ======= ======= ======= =======
Disclosure of supplemental cash
flow information:
Cash paid for interest including
dividends on mandatorily
redeemable preferred stock..... 360 700 2,681 2,667 4,066
Cash paid for income taxes...... 4,260 2,328 13,811 7,726 8,276
Disclosure of noncash activities:
Equipment purchased under
capital leases................. -- 201 1,693 817 3,610
Distribution of note receivable
from stockholder to Snyder
Marketing Services, Inc.
stockholders................... -- -- -- -- 2,725
Issuance of shares of common
stock for purchase of
subsidiaries................... 82,285 50,717 49,348 13,320 --
Issuance of note for purchase of
treasury stock................. -- -- 5,242 215 2,595
Redemption of common stock in
exchange for note payable...... -- -- -- 457 --
Distribution of non-operating
assets and distribution payable
by subsidiary.................. -- -- 1,155 -- --
Issuance of common stock related
to stock appreciation rights... -- 3,703 3,484 -- --
Tax benefit from exercise of
stock options.................. 1,781 1,829 7,742 5,312 99
Issuance of notes for purchase
of subsidiary.................. -- 1,350 -- -- --
Tax benefit from taxable merger
transactions................... -- 44,348 76,927 -- --
Acquisition of property and
assumption of debt for common
stock.......................... -- -- 1,945 -- --
Issuance of common stock for
conversion of subsidiary debt.. -- -- 1,741 -- --
</TABLE>

The accompanying notes are an integral part of this combined statement of cash
flows.

F-41
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS

(Information as of March 31, 1999 and for the three months ended March 31, 1999
and 1998 is unaudited.)

1. Organization, Basis of Presentation and Business:

Organization

Snyder Communications, Inc. ("Snyder Communications" or the "Company"), a
Delaware corporation, was incorporated on June 25, 1996, to continue the
business operations of Collegiate Marketing and Communications, L.P. Snyder
Communications completed an initial public offering of its common stock on
September 24, 1996.

Snyder Communications provides direct marketing, advertising and
communication services, Internet professional services and healthcare marketing
services to its clients.

On June 22, 1999, the Board of Directors (the "Board") of Snyder
Communications approved a plan to effect the distribution (the "Distribution")
of Snyder Communications' healthcare marketing services business to Snyder
Communications' existing stockholders. Snyder Communications intends to
consummate the Distribution in the third quarter of 1999 through a special
dividend of one share of common stock of a newly formed subsidiary, Snyder
Healthcare Services, Inc., for every two shares of existing Snyder
Communications common stock.

The Board of Snyder Communications has approved, subject to stockholder
approval, a "Recapitalization Proposal" that would result in authorization of
Snyder Communications to issue two classes of stock as follows: 80 million
shares of common stock designated as "circle.com stock" and 320 million shares
of common stock designated as "SNC stock." The circle.com stock is intended to
separately track the performance of Snyder Communications' Internet
professional services business, which Snyder Communications calls "circle.com"
and the SNC stock is intended to separately track the performance of the
remaining Snyder Communications' businesses and a retained interest in the
circle.com business, which Snyder calls "SNC." Each share of existing Snyder
Communications common stock will be converted into one share of SNC stock and
.25 of a share of circle.com Stock.

The SNC stock and the circle.com stock constitute common stock of Snyder
Communications, and the issuance of these classes of stock will not result in
any transfer of assets or liabilities of Snyder Communications or any of its
affiliates. Snyder Communications intends to issue shares of circle.com stock
representing 80% of the equity value attributed to circle.com. The remaining
equity value attributed to circle.com will remain with SNC as its "retained
interest" in circle.com.

Basis of Presentation

Throughout 1998 and 1997, SNC completed acquisitions that were accounted for
as poolings of interests for financial reporting purposes. The accompanying
combined financial statements have been retroactively restated to reflect the
pooling of interests transactions. During 1998 and 1997, SNC also made several
acquisitions that have been accounted for as purchase business combinations.
The entities with which SNC has entered into mergers accounted for as poolings
of interests for financial reporting purposes will be collectively referred to
as the "Pooled Entities," and their mergers will be referred to herein as the
"Acquisitions." The accompanying combined financial statements have been
retroactively restated to reflect the combined financial position and combined
results of operations and cash flows of SNC and the Pooled Entities, after
elimination of all significant intercompany transactions, for all periods
presented, giving effect to the Acquisitions as if they had occurred at the
beginning of the earliest period presented. Prior to its merger with SNC in
July 1997, American List Corporation utilized a February 28 fiscal year end.
Concurrent with the merger, American List Corporation changed its fiscal year
end to December 31. The accompanying combined statements of income and cash
flows for the year ended December 31, 1996 reflect the combination of the
American List Corporation statements of income and cash flows for the year
ended February 28, 1997.

F-42
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

The combined financial statements of circle.com and SNC comprise all of the
accounts included in the corresponding combined financial statements of Snyder
Communications. The separate combined financial statements give effect to the
accounting policies that will be applicable upon implementation of the
Recapitalization Proposal. The separate circle.com and SNC combined financial
statements have been prepared on a basis that management believes to be
reasonable and appropriate and reflect (1) the combined financial position,
results of operations and cash flows of the businesses that comprise
circle.com's and SNC's respective operations, with all significant intracompany
transactions and balances eliminated, (2) in the case of the circle.com
combined financial statements, corporate assets and liabilities of Snyder
Communications and related transactions associated with or conducted by
circle.com, including allocated portions of Snyder Communications' overhead and
administrative shared services and (3) in the case of SNC's combined financial
statements, all other corporate assets and liabilities and related transactions
of Snyder Communications, including allocated portions of Snyder
Communications' overhead and administrative shared services. Intercompany
transactions between circle.com and SNC have not been eliminated in SNC's
combined financial statements.

During the three months ended March 31, 1999, circle.com recorded $223,000 of
revenue for services to SNC. There were no intercompany transactions in 1998,
1997, and 1996.

Holders of circle.com stock and SNC stock will continue to be stockholders of
a single company. Circle.com and SNC are not separate legal entities. As a
result, stockholders will continue to be subject to all of the risks associated
with an investment in Snyder Communications and all of its businesses, assets
and liabilities. The issuance of circle.com stock and SNC stock and the
allocation of the assets and liabilities between circle.com and SNC will not
result in a distribution or spin-off of any assets or liabilities of Snyder
Communications and will not affect ownership of any assets or responsibility
for liabilities of Snyder Communications or any of its subsidiaries. The assets
of Snyder Communications attributed to SNC could be subject to the liabilities
of circle.com, whether such liabilities arise from lawsuits, contracts, or
indebtedness attributable to circle.com. If Snyder Communications is unable to
satisfy circle.com's liabilities out of assets attributed to it, Snyder
Communications may be required to satisfy these liabilities with assets
attributed to SNC.

Financial effects arising from one group that affect Snyder Communications'
combined results of operations or financial condition could, if significant,
affect the results of operations or financial condition of the other group and
the market price of the common stock relating to the other group. Any net
losses of circle.com or SNC and dividends and distributions on, or repurchases
of circle.com stock or SNC stock will reduce the funds of Snyder Communications
legally available for payment on SNC stock.

The management and allocation policies applicable to the preparation of the
financial statements of circle.com and SNC may be modified or rescinded, or
additional policies may be adopted, at the sole discretion of the Board at any
time without approval of the stockholders. SNC's combined financial statements
reflect the application of the management and allocation policies adopted by
the Board, as described below. SNC's combined financial statements should be
read in conjunction with Snyder Communications' combined financial statements.

Snyder Communications' overhead and administrative shared services expenses
have been allocated to SNC and circle.com based upon the estimated use of
services by that group. Overhead and administrative shared services includes
cost of executive management, human resources, legal, accounting, treasury and
strategic planning and information technology services. Where determinations
based on estimated use alone are not practical, other methods have been used
that management believes are equitable and provide a reasonable estimate of the
costs attributable to SNC. In the opinion of management, the methods for
allocating these costs are reasonable. It is not practicable to estimate the
costs that would have been incurred by SNC if it had been operated on a stand-
alone basis or as a separate legal entity.

F-43
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Changes in investments and advances from Snyder Communications represent the
net income (loss) of SNC, the comprehensive income (loss) of SNC, the net
change in cash transferred between SNC and Snyder Communications (or previous
owners with respect to the Pooled Entities prior to their merger with SNC) and
the effect of businesses acquired by Snyder Communications in purchase
transactions and contributed to SNC.

The analysis of investments and advances from Snyder Communications, net, is
as follows (in thousands):

<TABLE>
<S> <C>
Balance, December 31, 1995..................................... $ 36,044
Net income (loss)............................................ 13,060
Comprehensive income (loss).................................. 262
Noncash transfers from Snyder Communications, net of
distributions............................................... (4,377)
Cash transfers from Snyder Communications, net............... 21,518
--------
Balance, December 31, 1996..................................... 66,507
--------
Net income (loss)............................................ (26,747)
Comprehensive income (loss).................................. 382
Noncash transfers from Snyder Communications................. 35,829
Cash transfers from Snyder Communications, net............... 41,065
--------
Balance, December 31, 1997..................................... 117,036
--------
Net income (loss)............................................ 22,808
Comprehensive income (loss).................................. 1,198
Noncash transfers from Snyder Communications................. 147,423
Cash transfers from Snyder Communications, net............... 60,552
--------
Balance, December 31, 1998..................................... 349,017
--------
Net income (loss) (unaudited)................................ 19,678
Comprehensive income (loss) (unaudited)...................... (3,557)
Noncash transfers from Snyder Communications (unaudited)..... 84,602
Cash transfers from Snyder Communications, net (unaudited)... 8,882
--------
Balance, March 31, 1999 (unaudited)............................ $458,622
========
</TABLE>

Discontinued Operations

SNC's combined financial statements reflect the net assets and operating
results of the healthcare services business as discontinued operations pending
disposition (see Note 15). The net current and long-term assets (liabilities)
of the healthcare services business have been separately presented in the
accompanying combined balance sheet for all periods presented. The healthcare
services operating results are reflected in the accompanying combined statement
of income as income (loss) from discontinued operations for all periods
presented. The accompanying notes, except Note 15, relate only to continuing
operations of SNC.

Business

SNC provides direct marketing, advertising and communications services
through its BrannWorldwide, Bounty SCA Worldwide and Arnold Communications
networks. These networks develop and deliver messages to both broad and
targeted audiences through a wide range of communications channels. During 1998
and 1997, Snyder Communications issued 8,604,293 and 10,414,888 shares,
respectively, in pooling of interests transactions with companies in the direct
marketing, advertising and communications industry. Of the total

F-44
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

shares issued in pooling of interests transactions, 6,545,928 were to companies
that operate through BrannWorldwide, 8,983,714 were to companies that operate
through Bounty SCA Worldwide and 3,489,539 were to companies that operate
through Arnold Communications. The BrannWorldwide network includes Brann
Holdings Limited, Blau Marketing Technologies, Inc., Response Marketing Group
Holdings Limited, LLC and National Sales Service, Inc. The Bounty SCA Worldwide
network includes Bounty Group Holdings Limited, Sampling Corporation of America
and Echo Marketing, Inc. The Arnold Communications network includes Arnold
Communications, Inc. and BDDH Group Plc. The Company's operations are conducted
throughout the United States, the United Kingdom and continental Europe.

The following details revenues and net income (loss) from continuing
operations for each of the years ended December 31, 1998, 1997 and 1996, as
well as the three months ended March 31, 1999 (unaudited), and March 31, 1998
(unaudited) of SNC and the Pooled Entities through the dates of their
respective Acquisitions:

<TABLE>
<CAPTION>
For the Three
Months Ended For the Years Ended
March 31, December 31,
----------------- ----------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
(unaudited)
(in thousands)
<S> <C> <C> <C> <C> <C>
Revenues:
SNC......................... $132,955 $ 61,759 $389,651 $159,564 $ 82,840
Pooled Entities............. -- 46,082 90,638 237,941 263,075
-------- -------- -------- -------- --------
$132,955 $107,841 $480,289 $397,505 $345,915
======== ======== ======== ======== ========
Net income (loss) from
continuing operations:
SNC......................... $ 14,589 $ (2,322) $ 31,922 $ 5,881 $ 8,163
Pooled Entities............. -- (1,964) (10,560) (22,403) 7,528
-------- -------- -------- -------- --------
$ 14,589 $ (4,286) $ 21,362 $(16,522) $ 15,691
======== ======== ======== ======== ========
</TABLE>

Unaudited Pro Forma Information

During the three months ended March 31, 1999, SNC recorded $0.7 million of
nonrecurring acquisition and related costs. Combined income from continuing
operations adjusted to exclude acquisition and related costs was $15.1 million
for the three months ended March 31, 1999.

During the three months ended March 31, 1998, SNC recorded $22.8 million of
nonrecurring costs, consisting of acquisition and related costs and
compensation to stockholders. Combined income from continuing operations
adjusted to exclude nonrecurring acquisition and related costs and compensation
to stockholders was $9.4 million for the three months ended March 31, 1998.

During the year ended December 31, 1998, SNC recorded $39.5 million of
nonrecurring costs, consisting of acquisition and related costs and
compensation to stockholders. Combined income from continuing operations
adjusted to exclude nonrecurring acquisition and related costs and compensation
to stockholders was $48.5 million for the year ended December 31, 1998.

During the year ended December 31, 1997, SNC recorded $49.0 million of
nonrecurring costs, consisting of acquisition and related costs, ESOP expense
and compensation to stockholders. Combined income from

F-45
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

continuing operations adjusted to exclude nonrecurring acquisition and related
costs, ESOP expense and compensation to stockholders was $22.0 million for the
year ended December 31, 1997.

During the year ended December 31, 1996, SNC recorded $11.4 million of
nonrecurring costs, consisting of ESOP expense and compensation to
stockholders. Combined income from continuing operations adjusted to exclude
ESOP expense and compensation to stockholders was $18.2 million for the year
ended December 31, 1996.

Unaudited Interim Financial Statements

The accompanying unaudited combined balance sheet as of March 31, 1999 and
the combined statements of income and cash flows for the three months ended
March 31, 1999 and March 31, 1998 have been prepared by SNC without audit.
Certain information and footnote disclosures normally included in financial
statements presented in accordance with generally accepted accounting
principles have been omitted. SNC believes the disclosures made are adequate to
make the information presented not misleading. In the opinion of SNC, the
accompanying unaudited combined financial statements reflect all adjustments,
including only normal recurring adjustments, necessary to present fairly the
financial position of SNC at March 31, 1999 and the results of operations and
cash flows for the three months ended March 31, 1999 and March 31, 1998.

Business Considerations

There are important risks associated with SNC's business and financial
results. These risks include: (i) the reliance on significant clients (see Note
2); (ii) the ability to sustain and manage future growth; (iii) the ability to
manage and successfully integrate the businesses it has acquired and may
acquire in the future; (iv) the ability to successfully manage its
international operations; (v) the potential adverse effects of fluctuations in
foreign exchange rates; (vi) the dependence on industry trends toward
outsourcing of marketing services; (vii) the risks associated with reliance on
technology and the risk of business interruption resulting from a temporary or
permanent loss of such technology; (viii) the entrance of new competitors with
greater resources than SNC; (ix) potential competition between SNC and
circle.com; (x) the ability to recruit and retain qualified personnel; and (xi)
the dependence of the success of its executive officers and other key
employees, in particular, SNC's Chief Executive Officer.

2. Significant Clients:

SNC had one client that represented 10.7% of total revenues for the year
ended December 31, 1998, and one client that represented 15.8% and 14.6% of
total revenues for the years ended December 31, 1997 and 1996, respectively.

3. Summary of Significant Accounting Policies:

Cash and Equivalents

Marketable Securities

SNC's investments are classified into two categories. Those securities
classified as "available-for-sale" are reported at market value. Debt
securities consisting of state and municipal bonds are classified as "held-to-
maturity" and are reported at amortized cost. Cost is determined using the
specific identification method. Unrealized gains and losses from securities
"available-for-sale" are reported as a separate component of equity and
comprehensive income.

Receivables From Pass-Through Costs

Receivables from pass-through costs relate to services purchased from third
parties, on behalf of clients, for which no revenue is recorded.

F-46
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Property and Equipment

Property and equipment is stated at cost. SNC depreciates furniture, fixtures
and office and telephone equipment on a straight-line basis over three to ten
years; computer equipment over two to four years and buildings over forty
years. Leasehold improvements are amortized on a straight-line basis over the
shorter of the term of the lease or the estimated useful lives of the
improvements.

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

Revenue Recognition

SNC performs direct marketing and advertising services on behalf of its
clients, including database management, creative design, direct response
marketing, WallBoard(R) information displays, sampling programs, print
production, field sales, teleservices, advertising, public relations and media
placements. Revenues are recognized as services are rendered in accordance with
the terms of the contracts. Certain of these contracts provide for payments
based on accepted customers and the type of service purchased by the customer.
Revenues related to these sales are recognized on the date the application for
service is accepted by SNC's clients. At that point, SNC has no further
performance obligation related to the submitted customer and is contractually
entitled to payment. Revenues from the sale of lists are recognized upon the
shipment to customers of lists on computerized labels, magnetic tape or
computer diskettes for a one-time usage. Additional billings are made by SNC
for additional usage by the customers. Certain of the contracts include media,
postage and other pass-through costs purchased by SNC on behalf of its clients.
For these contracts, SNC records as revenue the net billings to its clients.

Goodwill and Other Intangible Assets

Goodwill equal to the fair value of consideration paid in excess of the fair
value of net assets purchased has been recorded in conjunction with several of
SNC's purchase business combinations and is being amortized on a straight-line
basis over periods of fifteen to thirty years.

The costs of customer lists that were acquired in conjunction with certain of
SNC's purchase business combinations are amortized on a straight-line basis
over seven years. The contractual covenants are amortized over the term of the
related agreements, which is two to five years.

Costs of purchased lists are amortized on a straight-line basis over their
estimated useful lives, generally one to five years. SNC determines the useful
lives of its lists based upon the estimated period of time such lists are
marketable. SNC periodically reviews the marketability of its lists and,
accordingly, their respective estimated useful lives.

F-47
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

The costs of licenses to use, reproduce and distribute lists are amortized on
a straight-line basis over the term of the related license agreement.

Income Taxes

Federal and state income tax provisions and related tax payments or refunds
are allocated between circle.com and SNC based principally on the taxable
income and tax credits directly attributable to each group. Such allocations
reflect each group's contribution, whether positive or negative, to Snyder
Communications' combined federal taxable income and the combined federal tax
liability and tax credit position. Tax benefits that cannot be used by the
group generating those benefits but can be used on a combined basis are
credited to the group that generated such benefits. Accordingly, the amounts of
taxes payable or refundable allocated to each group may not necessarily be the
same as that which would have been payable or refundable had each group filed a
separate income tax return.

Depending on the tax laws of the respective jurisdictions, foreign, state and
local income taxes are calculated on either a consolidated or combined basis or
on a separate corporation basis. State income tax provisions and related tax
payments or refunds are allocated between the groups based on their respective
contributions to such consolidated or combined state taxable incomes. State and
local income tax provisions and related payments which are determined on a
separate corporation basis are allocated between the groups in a manner
designed to reflect the respective contributions of the groups to the
subsidiary's separate foreign, state or local taxable income.

Prior to the merger with SNC, certain of the U.S. based pooled entities were
treated as S corporations or limited liability companies for income tax
purposes. Accordingly, no provision for federal or state income taxes, except
in certain states that do not recognize S corporations or limited liability
companies, has been made for these entities through the date of their mergers
within the accompanying combined financial statements of SNC.

SNC's subsidiaries with operations in the U.K. and continental Europe pay
taxes in their respective countries, on a corporate level similar to a C
corporation in the U.S.

Unaudited Pro Forma Adjusted Income (Loss) Data

The unaudited pro forma adjusted net income (loss) amounts include a
provision for federal and state income taxes as if the operations of SNC had
been a taxable C corporation for all periods presented. The pro forma income
tax rate on SNC's recurring operations reflects the combined federal, state and
foreign income taxes of approximately 36.1%, 39.6% and 43.6%, for the years
ended December 31, 1998, 1997 and 1996, respectively. The pro forma income tax
rates in the table below differ from the pro forma income tax rates on SNC's
recurring operations due to the nondeductibility of certain of the acquisition
and related costs.

F-48
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

The table below presents this pro forma calculation of adjusted net income
(loss):

<TABLE>
<CAPTION>
For the Three-
Months
Ended March 31, For the Years Ended December 31,
----------------- -------------------------------------
1999 1998 1998 1997 1996
------- -------- ----------- ----------- ----------
(unaudited)
(in thousands)
<S> <C> <C> <C> <C> <C>
Pro forma adjusted net
income (loss) data
(unaudited):
Historical income (loss)
from continuing
operations before
income taxes........... $23,669 $ (7,958) $ 36,334 $(12,582) $20,999
Pro forma benefit
(provision) for income
taxes.................. (9,080) 1,551 (17,758) (5,884) (9,084)
------- -------- ----------- ----------- ----------
Pro forma adjusted
income (loss) from
continuing operations.. 14,589 (6,407) 18,576 (18,466) 11,915
Discontinued operations,
less applicable pro
forma income taxes of
$(3,309), $(1,955),
$(12,849), $(3,309) and
$(3,713) for the three-
months ended March 31,
1999 and 1998 and
December 31, 1998, 1997
and 1996,
respectively........... 5,089 (4,052) 1,446 (11,601) (3,624)
Extraordinary item, less
applicable income taxes
of $806................ -- -- -- -- (1,216)
------- -------- ----------- ----------- ----------
Pro forma adjusted net
income (loss).......... $19,678 $(10,459) $ 20,022 $(30,067) $ 7,075
======= ======== =========== =========== ==========
</TABLE>

Accounting for Stock Options

Following the implementation of the Recapitalization Proposal, SNC will
account for its stock-based compensation plan using the intrinsic value based
method in accordance with the provisions of APB Opinion No. 25, "Accounting for
Stock Issued to Employees." Pro forma disclosure will be made of net income and
earnings per share, calculated as if SNC accounted for its stock-based
compensation plan using the fair value based method in accordance with the
provisions of Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation" ("SFAS No. 123").

Foreign Currency Translations

Assets and liabilities of SNC's international operations are translated using
the exchange rate in effect at the balance sheet date. Revenue and expense
accounts for these subsidiaries are translated using the average exchange rate
during the period. Foreign currency translation adjustments are reported as
comprehensive income (loss) and included as a component of investment and
advances from Snyder Communications.

Estimates and Assumptions

F-49
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Fair Value of Financial Instruments

SFAS No. 107, "Disclosures about Fair Value of Financial Instruments,"
requires disclosure of the fair value of certain financial instruments. For
purposes of this disclosure, the fair value of a financial instrument is the
amount at which the instrument could be exchanged in a current transaction
between willing parties. Cash and equivalents, accounts receivable, unbilled
services and accounts payable approximate fair value because of the relatively
short maturity of these instruments. As a result of the related party nature of
the majority of SNC's outstanding borrowings at December 31, 1998 and 1997, and
the fact that substantially all borrowings from third parties were secured by
the previously independent subsidiaries that had capital structures different
than SNC's, it is impracticable to estimate the fair value of the debt
outstanding at these dates.

Concentration of Credit Risk

Concentration of credit risk is limited to cash and equivalents, marketable
securities, accounts receivable and unbilled services. SNC places its
investments in highly rated financial institutions, U.S. Treasury bills,
investment grade short-term debt instruments and state and local
municipalities, while limiting the amount of credit exposure to any one entity.
SNC's receivables are concentrated with customers in the telecommunications and
consumer packaged goods industries. SNC does not require collateral or other
security to support clients' receivables.

Unaudited Pro Forma Net Income Per Share

Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
("SFAS No. 128") has been applied to all periods presented in these combined
financial statements. SFAS No. 128 requires disclosure of basic and diluted
EPS. Basic EPS is computed by dividing reported earnings available to common
stockholders by the weighted average number of shares outstanding without
consideration of common stock equivalents or other potentially dilutive
securities. Diluted EPS gives effect to common stock equivalents and other
potentially dilutive securities outstanding during the period. For all periods
presented basic EPS has been computed using the SNC shares that will be issued
upon the Recapitalization. Basic and diluted EPS are the same for all years
presented as there will be no SNC options granted until the Recapitalization.

New Accounting Pronouncements

During 1998, SNC adopted Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income" ("SFAS No. 130"), and the accompanying
combined financial statements have been restated to conform to the SFAS No. 130
requirements. Included within accumulated other comprehensive income (loss) are
the cumulative amounts for foreign currency translation adjustments and
unrealized gains and losses on marketable securities. The cumulative foreign
currency translation adjustment was $(1.7) million, $1.8 million and $0.6
million as of March 31, 1999, December 31, 1998 and 1997, respectively. The
cumulative unrealized gain on marketable securities was $0, $11,000 and $64,000
as of March 31, 1999, December 31, 1998 and 1997, respectively.

During 1998, SNC adopted Statement of Financial Accounting Standards No. 131,
"Disclosures About Segments of an Enterprise and Related Information" ("SFAS
No. 131"). SNC's foreign operations are disclosed in Note 19. SNC's networks
provide services used to develop and deliver messages to both broad and
targeted audiences through a wide range of communications channels. The
operations within SNC's networks exhibit similar economic characteristics
driven from their consistent efforts to build brands and increase market
penetration for their clients. These operations are reported as one operating
segment.

During 1998, SNC adopted Statement of Financial Accounting Standards No. 132,
"Employers' Disclosures about Pensions and Other Postretirement Benefits"
("SFAS No. 132"). The disclosures required by SFAS No. 132 are provided in Note
14.

F-50
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

SNC's Investment in circle.com

SNC's retained interest of 20% in circle.com is reflected as "Retained
interest in circle.com" in the accompanying combined balance sheet. Similarly,
SNC's retained interest of 20% of the net income (loss) of circle.com is
reflected as "Income (loss) related to retained interest in circle.com" in the
accompanying combined statements of operations. SNC accounts for its retained
interest in circle.com in a manner consistent with the method prescribed under
APB No. 18, "The Equity Method of Accounting for Investments in Common Stock."

4. Marketable Securities:

The amortized cost, unrealized gains and losses, and market values of SNC's
held-to-maturity and available-for-sale securities are summarized as follows
(in thousands):

<TABLE>
<CAPTION>
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ------
<S> <C> <C> <C> <C>
December 31, 1998
Held to maturity, maturing in
less
than one year:
State and municipal bonds..... $ 6 $-- $ -- $ 6
==== === ==== ====
Available for sale:
Equity securities............. $105 $-- $(15) $ 90
Government income securities.. 555 -- (39) 516
---- --- ---- ----
$660 $-- $(54) $606
==== === ==== ====
December 31, 1997
Held to maturity, maturing in
less
than one year:
State and municipal bonds..... $664 $-- $ -- $664
==== === ==== ====
Available for sale:
Equity securities............. $ 83 $ 7 $ -- $ 90
Municipal tax-exempt bonds.... 483 4 487
---- --- ---- ----
$566 $11 $ -- $577
==== === ==== ====
</TABLE>

5. Property and Equipment:

Property and equipment consist of the following:

<TABLE>
<CAPTION>
As of December
31,
------------------
1998 1997
-------- --------
(in thousands)
<S> <C> <C>
Buildings and leasehold improvements................... $ 49,596 $ 23,650
Computers and equipment................................ 51,424 40,728
Furniture and fixtures................................. 12,912 12,532
-------- --------
113,932 76,910
Accumulated depreciation............................... (46,492) (36,581)
-------- --------
$ 67,440 $ 40,329
======== ========
</TABLE>

Depreciation expense totaled $12.3 million, $10.3 million and $9.7 million in
1998, 1997 and 1996, respectively.

F-51
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

6. Goodwill and Other Intangible Assets:

Goodwill and other intangible assets consist of the following:

<TABLE>
<CAPTION>
As of December
31,
------------------
1998 1997
-------- --------
(in thousands)
<S> <C> <C>
Goodwill............................................... $ 62,318 $ 38,468
Unamortized costs of lists............................. 5,674 4,458
License agreements..................................... 2,284 2,000
Customer lists and contractual covenant................ 9,987 11,558
-------- --------
80,263 56,484
Accumulated amortization............................... (14,400) (13,824)
-------- --------
$ 65,863 $ 42,660
======== ========
</TABLE>

Goodwill arose from purchase acquisitions at certain of the Pooled Entities
prior to their respective mergers with SNC and from 1998 and 1997 purchase
business combinations.

Amortization expense of goodwill and other intangible assets totaled $4.6
million, $3.0 million and $3.1 million in 1998, 1997 and 1996, respectively.

7. Debt:

Long-Term Borrowings

Long-term borrowings consist of the following:

<TABLE>
<CAPTION>
As of December 31,
--------------------
1998 1997
--------- ---------
(in thousands)
<S> <C> <C>
Notes, principally acquisition related, 7%-8%, due
January
2000 and 2002...................................... $ 1,297 $ 1,226
Belgian bank debt, 4.7% weighted average rate, due
various dates through 2005 346 --
U.S. bank debt, commercial paper rate plus 2.7%
(approximately 8.55%).............................. -- 2,099
United Kingdom bank debt, base rate plus 2.25%
(approximately 7.25%), secured by certain assets in
the United Kingdom................................. -- 460
Obligations under license agreement, 7.25% imputed
rate............................................... 1,058 1,558
Other............................................... -- 300
--------- ---------
2,701 5,643
Current maturities of long-term borrowings.......... (1,085) (1,708)
--------- ---------
$ 1,616 $ 3,935
========= =========
</TABLE>

F-52
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Future minimum payments as of December 31, 1998, on long-term borrowings,
excluding capital leases, are as follows (in thousands):

<TABLE>
<S> <C>
1999.............................................................. $1,085
2000.............................................................. 516
2001.............................................................. 531
2002.............................................................. 392
2003.............................................................. 177
------
Total....................................................... $2,701
======
</TABLE>

Related Party Borrowings

Related party borrowings consist of the following:

<TABLE>
<CAPTION>
As of December 31,
-------------------
1998 1997
--------- ---------
(in thousands)
<S> <C> <C>
Note payable, acquisition related, 7%, due September
30, 2002............................................ $7,504 $3,682
Note payable, acquisition related, 5% for first two
years and 7%
during third, due February 18, 2001................. 1,420 --
Convertible subordinated debentures payable to
shareholder
of acquired subsidiary, 7%, due September 2000,
converted prior to subsidiary's merger with SNC..... -- 1,651
Shareholder loans of acquired subsidiary, 5.73% to
5.91%............................................... -- 1,571
Note payable to partner of acquired subsidiary,
9.5%................................................ -- 938
--------- ---------
8,924 7,842
Current maturities of related party borrowings....... -- (770)
--------- ---------
$8,924 $7,072
========= =========
</TABLE>

On October 28, 1996, SNC used approximately $7.0 million of cash to redeem in
full the subordinated debentures (the "Debentures") due to related parties. The
Debentures were originally issued on May 18, 1995, with a face amount of $6.0
million. Cash proceeds of $5.0 million were received upon issuance of the
Debentures. The difference between the cash proceeds received and the face
amount of the Debentures was accounted for as an original issue discount. The
Debentures had a stated interest rate of 12.25% (effective interest rate to
maturity of approximately 17%) and an original maturity date of December 31,
2001. The $7.0 million payment consisted of the face amount of the Debentures,
a prepayment penalty and accrued interest. A nonrecurring charge of $1.2
million ($0.02 per basic and diluted share), net of an $0.8 million tax
benefit, was recorded at December 31, 1996 as an extraordinary loss related to
this early debt extinguishment. The extraordinary item consists of prepayment
penalties and the write-off of unamortized discount and debt issuance costs.

F-53
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Lines of Credit

Lines of credit consist of the following:

<TABLE>
<CAPTION>
As of
December 31,
-------------
1998 1997
------ ------
(in
thousands)
<S> <C> <C>
U.S. bank line of credit, prime rate plus 0.5% (8.25% at December
31, 1998),
$2.3 million maximum borrowing limit............................ $1,825 $1,500
U.S. financial banking institution line of credit, 30-day
commercial paper rate
plus 2.7% (7.94% at December 31, 1997), $5.5 million maximum
borrowing limit................................................. -- 4,537
Related party line of credit from acquired U.S. subsidiary, prime
rate plus 1%
(9.5% at December 31, 1997), terminated by SNC in 1998.......... -- 3,123
Other borrowings outstanding under credit lines.................. -- 15
------ ------
$1,825 $9,175
====== ======
</TABLE>

SNC maintains various lines of credit with banking and financial
institutions, requiring certain subsidiaries to meet restrictive covenants
concerning net worth and debt service coverage and are secured by the assets of
those subsidiaries. In aggregate, SNC had lines of credit available for $19.0
million with interest rates ranging from 7.50% to 9.50% at December 31, 1998.

8. Common Stock:

Under the terms of the Recapitalization Proposal, holders of SNC stock and
circle.com stock generally will not have stockholder rights specific to their
corresponding groups. Instead, holders will have customary stockholder rights
relating to Snyder Communications as a whole. If Snyder Communications sells
all or substantially all of the assets attributed to circle.com, Snyder
Communications must either: (1) pay a dividend to holders of circle.com stock
equal to a proportionate interest in the net proceeds of that sale; (2) redeem
outstanding shares of circle.com from their holders for an amount equal to a
proportionate interest in the net proceeds of that sale; or (3) issue SNC stock
in exchange for outstanding circle.com stock at a 10% premium to the value of
the circle.com stock being exchanged. Snyder Communications will not be
required to do any of the above if: (1) the sale is in connection with the
liquidation of Snyder Communications; (2) the sale is a spin-off of circle.com
to the holders of circle.com stock; (3) the sale is to a person or entity
controlled by Snyder Communications; or (4) the sale results in Snyder
Communications receiving primarily equity securities of any entity that
acquires the assets and is primarily engaged in a business similar or
complementary to the business engaged in by circle.com.

At any time, Snyder Communications may convert the circle.com stock into SNC
stock at a premium. If there are adverse U.S. federal income tax law
developments, Snyder Communications may convert the circle.com stock and SNC
stock without any premium. Snyder Communications may redeem this stock for
stock of one of the subsidiaries that holds all of the assets and liabilities
attributed to circle.com. Holders will share assets remaining for distribution
to holders of common stock on a per share basis in proportion to the
liquidation units per share.

F-54
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

9. Income Taxes:

SNC's income tax provision includes the following components:

<TABLE>
<CAPTION>
For the Years Ended
December 31,
-------------------------
1998 1997 1996
------- ------- -------
(in thousands)
<S> <C> <C> <C>
Current:
U.S.--Federal................................... $10,737 $ 5,322 $ 5,706
U.S.--State and city............................ 2,660 2,488 1,328
Foreign......................................... 6,984 2,462 1,286
------- ------- -------
20,381 10,272 8,320
------- ------- -------
Deferred:
U.S.--Federal................................... (5,398) (4,492) (1,943)
U.S.--State and city............................ (1,402) (1,217) (466)
Foreign......................................... 1,391 (623) (603)
------- ------- -------
(5,409) (6,332) (3,012)
------- ------- -------
Income tax provision............................ $14,972 $ 3,940 $ 5,308
======= ======= =======
</TABLE>

The provision for taxes on income before extraordinary item differs from the
amount computed by applying the U.S. federal income tax rate as a result of the
following:

<TABLE>
<CAPTION>
For the Years Ended
December 31,
----------------------
1998 1997 1996
----- ------ ------
<S> <C> <C> <C>
Taxes at statutory U.S. federal income tax rate.... 35.00% 35.00% 35.00%
Income taxed directly to owners.................... (7.67) 14.80 (31.48)
State and city income taxes, net of federal tax
benefit........................................... 3.95 (10.87) 5.05
Tax effect of Reorganization....................... -- -- (3.07)
Foreign tax rate differential...................... (9.55) 11.23 0.21
Dividends on mandatorily redeemable preferred
stock............................................. -- (1.34) 0.87
Goodwill amortization.............................. 0.63 (1.12) 0.64
Acquisition costs and other permanent differences.. 18.85 (79.01) 18.06
----- ------ ------
Effective tax rate................................. 41.21% (31.31)% 25.28%
===== ====== ======
</TABLE>

F-55
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
As of December
31,
-----------------
1998 1997
-------- -------
(in thousands)
<S> <C> <C>
Reserve for doubtful accounts............................. $ 3,616 $ 1,020
Accrued expenses.......................................... 4,349 2,955
Intangible assets......................................... 85,091 --
Deferred compensation..................................... 4,102 3,730
Tax losses of subsidiaries................................ 1,964 1,964
Tax benefit of capital losses............................. 1,202 1,202
Deferred revenues......................................... -- 198
Other..................................................... 7,934 528
-------- -------
Gross deferred tax assets................................. 108,258 11,597
-------- -------
Property and equipment.................................... (1,131) (20)
Deferred revenues......................................... (1,180) --
Other..................................................... (2,594) (71)
-------- -------
Gross deferred tax liabilities............................ (4,905) (91)
-------- -------
Valuation allowance....................................... (3,167) (3,167)
-------- -------
Net deferred tax asset.................................... $100,186 $ 8,339
======== =======
</TABLE>

Several of SNC's subsidiaries have capital and operating loss tax
carryforwards that can be realized only if these subsidiaries generate taxable
capital gains or operating income, respectively. At December 31, 1998 and 1997,
management determined that a valuation allowance against the deferred tax asset
associated with these tax losses was required for one of these subsidiaries.
Management continually assesses whether SNC's deferred tax asset is realizable
and believes that the deferred tax asset, net of the valuation allowance, is
realizable at December 31, 1998.

SNC will receive a future benefit arising from the tax treatment of three of
SNC's taxable mergers completed in 1998. In accordance with generally accepted
accounting principles, as a result of the mergers being accounted for as
poolings of interests, the net estimated future tax benefit of approximately
$76.9 million is reflected as a deferred tax asset in the accompanying combined
balance sheet as of December 31, 1998, with the offsetting credit to investment
and advances from Snyder Communications.

At December 31, 1998, cumulative combined undistributed earnings of SNC's
foreign subsidiaries were approximately $5.2 million. No provision for U.S.
income taxes or foreign withholding taxes has been made since SNC considers the
undistributed earnings to be permanently invested in the foreign countries.
Determination of the amount of unrecognized deferred tax liability, if any, for
the cumulative undistributed earnings of the foreign subsidiaries is not
practicable since it would depend upon a number of factors which cannot be
known until such time as a decision to repatriate the earnings is made.

10. Acquisition and Related Costs:

SNC recorded $38.9 million in nonrecurring acquisition and related costs
during 1998. These costs are primarily related to the consummation of 1998
mergers and consist of investment banking fees, expenses associated with the
accelerated vesting of options held by employees of certain of SNC's acquirees,
other professional service fees, transfer taxes and other contractual payments.
In addition, this amount includes a charge of approximately $2.6 million for
costs necessary to consolidate and integrate certain of SNC's acquired

F-56
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

operations in the U.S. Approximately four locations will be combined into two.
SNC expects these integration activities to be substantially complete by the
third quarter of 1999. The charge consists of approximately $1.6 million of
severance and other costs associated with the termination of 42 employees, and
$1.0 million of fees incurred for other costs related to these integration
activities. The integration is not expected to result in a headcount reduction.
Most of the terminated employees elected not to relocate and will be replaced.
As of December 31, 1998, no employees had terminated employment with SNC and
$0.3 million had been charged against the total liability.

SNC recorded $31.4 million in nonrecurring acquisition and related costs
during 1997. These costs consist primarily of investment banking fees, other
professional service fees, certain U.K. excise and transfer taxes, as well as a
noncash charge of approximately $9.1 million related to the accelerated vesting
of the options held by employees of one of SNC's acquirees. The remaining $5.3
million consists of the write-off of deferred license fees and the accrual of a
liability expected to resolve outstanding litigation. Both the write-off of the
deferred fees and the accrual of the liability were recorded due to changes in
fact that resulted from the mergers.

During the three months ended March 31, 1999, SNC recorded $0.7 million in
nonrecurring acquisition and related costs. This amount is for costs necessary
to consolidate and integrate certain of SNC's acquired operations in the U.S.
under the plan initiated in the fourth quarter of 1998. The charge recorded in
the first quarter of 1999 consists of consulting services and other costs
related to these integration activities. As of March 31, 1999, $1.3 million had
been charged against the total liability of $3.3 million.

During the three months ended March 31, 1998, SNC recorded $22.6 million in
nonrecurring acquisition and related costs. These costs are primarily related
to the consummation of pooling of interest transactions in the first quarter of
1998 and consist primarily of investment banking fees, other professional
service fees and other contractual payments.

11. Compensation to Stockholders:

Prior to their merger with SNC, certain stockholders of the acquired
companies received annual compensation in their roles as managers in excess of
amounts that they will receive pursuant to employment agreements they have
entered into with SNC. The amount by which the historical compensation paid to
these managers exceeds that provided in their employment contracts has been
classified as compensation to stockholders in the accompanying combined
statement of income.

12. Employee Stock Ownership Plan:

One of SNC's U.S. subsidiaries sponsors an employee stock ownership plan
("ESOP") which covers primarily all of its employees who work one thousand
hours or more per plan year. Contributions to the ESOP were made at the
discretion of the subsidiary's Board of Directors and were equal to the ESOP's
debt service less dividends received by the ESOP. In December 1994, the ESOP
acquired 534,800 shares from the former chairman of the subsidiary in exchange
for $0.4 million in cash and a promissory note of $6.0 million. The note was
guaranteed by the subsidiary, secured by the ESOP stock and bore interest,
which was payable monthly at 2.7% over the 30-day commercial paper rate.
Principal payments were due in five annual installments of $1.2 million
commencing January 1, 1996. As of December 31, 1997, the entire amount had been
repaid. In January 1995, the ESOP acquired an additional 176,090 shares at a
cost of $1.9 million. Of this amount, $1.8 million was financed through a
promissory note with the remaining $0.1 million paid in cash. This promissory
note was guaranteed by the subsidiary and its former chairman and was due in 84
monthly installments commencing January 1, 1996 with interest at 2.7% over the
30-day commercial paper rate. As of December 31, 1997, the entire amount had
been repaid.

F-57
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

All dividends and contributions received by the ESOP were used to pay debt
service for the period which the ESOP was leveraged. As the debt was repaid,
shares were released and allocated to active participants based on the
proportion of debt service paid in the year. The ESOP was accounted for in
accordance with Statement of Position No. 93-6 "Employers' Accounting for
Employee Stock Ownership Plans." Accordingly, the debt of the ESOP was recorded
as debt in the accompanying combined balance sheet, and the shares that had not
been allocated to participants were reported as unearned ESOP compensation in
the equity section on the combined balance sheet. As shares were committed to
be released, SNC recorded compensation expense equal to the then current market
price of the shares committed to be released, and the shares were treated as
outstanding for earnings-per-share (EPS) computations. Dividends on allocated
ESOP shares were recorded as a reduction of retained earnings; dividends on
unallocated ESOP shares were recorded as a reduction of debt and accrued
interest. ESOP compensation expense for SNC was $5.2 million and $6.5 million
for 1997 and 1996, respectively. ESOP compensation expense allocated to
circle.com was approximately $218,000 and $113,000 for 1997 and 1996,
respectively. The status of ESOP shares as of December 31 is as follows:

<TABLE>
<CAPTION>
As of December
31,
-----------------
1998 1997
-------- -------
<S> <C> <C>
Allocated shares......................................... 710,890 570,590
Shares released for allocation........................... -- 140,300
Shares sold.............................................. (301,459) --
-------- -------
Total ESOP shares........................................ 409,431 710,890
======== =======
</TABLE>

All ESOP shares had been released as of December 31, 1998 and 1997.

Former employees who had terminated employment with the subsidiary prior to
its merger with SNC may, at their option, require SNC to repurchase their
vested shares held by the ESOP for fair value. The balance necessary to satisfy
this repurchase obligation has been classified as Redeemable ESOP stock in the
accompanying combined balance sheet with a like amount shown as a reduction of
paid-in capital for each year.

13. Stock Plans:

Amended and Restated Stock Incentive Plan

Upon approval by the Snyder Communications stockholders, the Second Amended
and Restated Stock Incentive Plan ("Amended Stock Plan") will become effective
upon the implementation of the Recapitalization Proposal. The Amended Stock
Plan authorizes the Company to grant incentive stock options, nonqualified
stock options, restricted stock awards, and stock appreciation rights based on
circle.com stock and SNC stock.

If the Recapitalization Proposal and related stock incentive plan proposal
are approved and implemented, outstanding awards previously granted under the
stock incentive plan based upon shares of existing Snyder common stock will be
adjusted so that each holder of an outstanding award will receive a
corresponding award based upon shares of SNC stock or circle.com stock. Each
outstanding option to purchase a share of existing common stock held by a
circle.com employee will be converted into an option to purchase shares of
circle.com stock. Each outstanding option to purchase a share of existing
common stock hold by an SNC employee will be converted into an option to
purchase shares of SNC stock. Each outstanding option held by Snyder
Communications directors and certain corporate level officers will be converted
into an option to purchase shares of SNC stock and circle.com stock. In each
case, the exercise prices of options will be adjusted in order to maintain the
economic position of option holders. The aggregate intrinsic value of the
options outstanding and the ratio of the exercise price per option to the
market value per share will not change.

F-58
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

14. Pension and Profit-Sharing Plans:

One of SNC's subsidiaries in the U.K. operates a retirement benefit plan,
which is a funded defined benefit plan available to all employees. The assets
of the plan are held separately from those of the subsidiary and are invested
in managed funds principally comprised of equity securities. Plan benefits are
based on years of service and compensation levels at the time of retirement.
The funding of the plan is determined following consultation with actuaries
using the projected unit credit method.

For purposes of these combined financial statements, the actuarial value of
the plan's liabilities has been estimated using the available actuarial
valuations, and the plan's asset values reflect the actual market value of
those assets at each balance sheet date based on records maintained by the
plan's trustees. The most recent actuarial update of the plan's liabilities was
performed as of December 31, 1998. The significant assumptions used and the
funded status of the plan are set out in the tables below.

<TABLE>
<CAPTION>
Significant
Assumptions
----------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Discount rate............................................ 5.5% 6.75% 8.0%
Expected long-term rate of return on plan assets......... 8.5 7.75 9.0
Rate of increase in compensation......................... 4.0 5.25 6.0
</TABLE>

Net Periodic Pension Cost

Net periodic pension cost is determined using the assumptions as of the
beginning of the year and is comprised of the following:

<TABLE>
<CAPTION>
For the Years Ended
December 31,
----------------------
1998 1997 1996
------ ------ ------
(in thousands)
<S> <C> <C> <C>
Service cost..................................... $1,375 $1,360 $1,109
Interest cost on projected benefit obligation.... 1,177 1,065 875
Expected return on plan assets................... (1,392) (2,899) (1,078)
Net amortization of unrecognized net loss and
deferral of actual return on plan assets........ -- 1,638 125
------ ------ ------
Net periodic pension cost........................ $1,160 $1,164 $1,031
====== ====== ======
</TABLE>

F-59
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Funded Status

The funded status is determined using the assumption as of the end of the
year and is reflected as follows:

<TABLE>
<CAPTION>
As of December
31,
----------------
1998 1997
------- -------
(in thousands)
<S> <C> <C>
Change in benefit obligation:
Benefit obligation at beginning of year.................. $17,502 $13,931
Service cost............................................. 1,375 1,360
Interest cost............................................ 1,177 1,065
Plan participants' contributions......................... 646 590
Actuarial gain........................................... 1,143 1,195
Benefits paid............................................ (464) (639)
------- -------
Benefit obligation at end of year........................ $21,379 $17,502
======= =======
Change in plan assets:
Fair value of plan assets at beginning of year........... $17,321 $13,777
Actual return on plan assets............................. 2,913 2,430
Employee contribution.................................... 646 590
Employer contribution.................................... 1,342 1,163
Benefits paid............................................ (464) (639)
------- -------
Fair value of plan assets at end of year................. $21,758 $17,321
======= =======
</TABLE>

SNC maintains defined contribution benefit plans. Pension and profit sharing
costs related to these plans amounted to approximately $1.6 million, $1.0
million, and $1.0 million for 1998, 1997 and 1996, respectively.

15. Discontinued Operations:

Snyder Healthcare Services, Inc.

On June 22, 1999, Snyder Communications' Board of Directors approved a plan
to effect the Distribution of 100% of the common shares of a newly formed
wholly owned subsidiary, Snyder Healthcare Services, Inc., ("Healthcare"), to
Snyder Communications' common stockholders of record at the close of business
on a date to be determined (the "Spin-off"). Common shares will be distributed
on the basis of one share of Healthcare for every two shares of existing Snyder
Communications common stock. Following the Distribution, Healthcare will become
an independent, publicly traded corporation. Accordingly, the results of
Healthcare have been reclassified from amounts previously reported, and are
stated separately in the accompanying combined financial statements as
discontinued operations pending disposition. Summarized financial information
of the discontinued Healthcare operations is presented in the following tables:

F-60
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Earnings from discontinued Healthcare operations included in the accompanying
combined statement of income are as follows (in thousands):

The components of net assets (liabilities) of discontinued Healthcare
operations included in the accompanying combined balance sheet are as follows
(in thousands):

<TABLE>
<CAPTION>
March 31, December 31,
----------- ----------------
1999 1998 1997
----------- -------- -------
(unaudited)
<S> <C> <C> <C>
Cash and equivalents.............................. $ 24,288 $ 25,664 $18,040
Accounts receivable, net.......................... 50,700 43,521 29,331
Unbilled services................................. 24,183 15,212 6,769
Other............................................. 11,530 11,052 9,101
-------- -------- -------
Total current assets............................ 110,701 95,449 63,241
-------- -------- -------
Lines of credit................................... 633 198 22,875
Accounts payable and accrued expenses............. 59,670 60,393 49,274
Unearned revenue.................................. 9,564 8,446 14,125
Other............................................. 7,240 1,965 137
-------- -------- -------
Total current liabilities....................... 77,107 71,002 86,411
-------- -------- -------
Net current assets (liabilities)................ 33,594 24,447 (23,170)
-------- -------- -------
Property and equipment, net....................... 11,754 10,028 4,880
Goodwill and other intangibles.................... 97,335 80,728 26,283
Other............................................. 4,461 7,439 6,543
-------- -------- -------
Total long-term assets.......................... 113,550 98,195 37,706
Total long-term liabilities..................... 1,339 2,915 4,165
-------- -------- -------
Net long-term assets............................ 112,211 95,280 33,541
-------- -------- -------
Total net assets of discontinued operations..... $145,805 $119,727 $10,371
======== ======== =======
</TABLE>

F-61
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

The cash flow provided by (used in) discontinued Healthcare operations was as
follows (in thousands):

<TABLE>
<CAPTION>
For the Three Months For the Years Ended
Ended March 31, December 31,
---------------------- -------------------------
1999 1998 1998 1997 1996
---------- ---------- ------- ------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Operating activities of
discontinued operations:
Income (loss) from
discontinued operations... $ 5,089 $ (4,052) $ 1,446 $(8,718) $ 83
Adjustments to reconcile
income (loss) from
discontinued operations to
net cash provided by (used
in) operating activities.. 1,850 3,338 9,133 (2,308) 325
Net change in assets and
liabilities............... (12,505) (2,225) (11,800) 9,102 510
---------- ---------- ------- ------- -------
Net cash provided by (used)
operating activities...... (5,566) (2,939) (1,221) (1,924) 918
---------- ---------- ------- ------- -------
Net cash used in investing
activities................ (313) (415) (7,190) (3,576) (1,699)
---------- ---------- ------- ------- -------
Investments and advances
from Snyder............... 5,754 5,780 42,753 (167) (7,998)
Other financing
activities................ (1,135) (3,742) (26,917) 16,618 (758)
---------- ---------- ------- ------- -------
Net cash provided by (used
in) financing activities.. 4,619 2,038 15,836 16,451 (8,756)
---------- ---------- ------- ------- -------
Net cash provided by (used
in) discontinued
operations before effect
of exchange rate changes
on cash................... (1,260) (1,316) 7,425 10,951 (9,537)
Effect of exchange rate
changes on cash........... (116) (349) 199 (177) 76
---------- ---------- ------- ------- -------
Cash flow provided by (used
in) discontinued
operations................ $ (1,376) ($ 1,665) $ 7,624 $10,774 ($9,461)
========== ========== ======= ======= =======
</TABLE>

During the year ended December 31, 1998, Healthcare recorded a charge of
approximately $10.7 million for costs necessary to consolidate and integrate
certain of SNC's acquired operations in the U.S., the U.K. and France. SNC is
integrating acquired subsidiaries that provide similar services within the same
geographic regions. Approximately nine locations will be combined into four,
and the efforts will not have a significant impact on SNC's workforce. SNC
expects these integration activities to be substantially complete by the third
quarter of 1999. The charge consists of approximately $4.1 million to
consolidate and terminate lease obligations, $5.3 million of severance and
other costs associated with the termination of 142 employees, and $1.3 million
of fees incurred for consulting services and other costs related to these
integration activities. The employees who were terminated are primarily
redundant operations and administrative personnel, as well as one underutilized
sales team in the U.K. As of December 31, 1998, 58 employees had terminated
employment with SNC and $2.7 million had been charged against the total
liability, including $1.5 million in severance and related payments.

During the three months ended March 31, 1999, Healthcare recorded $1.6
million in nonrecurring acquisition and related costs. This amount is for
additional costs necessary to consolidate and integrate certain of SNC's
acquired operations in the U.S. and U.K. under SNC's plan initiated in 1998.
The charge recorded in the first quarter of 1999 consists of $1.3 million in
severance and related costs associated with the termination of 23 employees,
and $0.3 million in consulting services and other costs related to these
integration activities. As of March 31, 1999, 128 employees had terminated
employment with SNC and $5.7 million had been charged against the total
liability of $12.2 million.

Bob Woolf Associates, Inc.

On October 24, 1997, the Board of Directors of one of the 1998 acquirees
approved the spin-off of its sports management operations, which were carried
on by Bob Woolf Associates, Inc. ("BWA"), a wholly owned subsidiary. The
acquiree purchased BWA in May 1996. The spin-off was executed in the form of a
dividend to the acquiree's stockholders of record on October 31, 1997, whereby
each stockholder received one share of BWA for each share of the acquiree's
common stock held.

F-62
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

The net losses of BWA prior to October 31, 1997 are included in the
accompanying combined statement of income under "discontinued operations" and
totaled $1.5 million in 1997 and 1996. Revenues from BWA were approximately
$0.3 million for the period from May 1, 1996 (date of BWA acquisition) to
December 31, 1996, and approximately $2.0 million for the ten months ended
October 31, 1997.

16. Leases:

SNC leases certain facilities, office equipment and other assets. The
following is a schedule of future minimum lease payments for capital leases and
for operating leases with initial or remaining terms in excess of one year at
December 31, 1998 (in thousands):

<TABLE>
<CAPTION>
Capital Operating
Years Ending December 31, Leases Leases
------------------------- ------- ---------
<S> <C> <C>
1999 $2,024 $16,809
2000 960 14,657
2001 343 12,947
2002 301 8,993
2003 171 5,561
Thereafter.............................................. 5 18,587
------ -------
Total minimum lease payments............................ 3,804 $77,554
=======
Less: Amount representing interest...................... (376)
------
Total obligation under capital leases................... 3,428
Less: Current portion................................... (1,685)
------
Long-term portion....................................... $1,743
======
</TABLE>

Property and equipment, net, on the accompanying combined balance sheet
includes $3.7 million and $3.8 million for equipment purchased under capital
leases as of December 31, 1998 and 1997, respectively.

Rental expense for all operating leases was approximately $18.3 million,
$15.0 million and $15.1 million for the years ended December 31, 1998, 1997 and
1996, respectively.

17. Commitments and Contingencies:

Snyder Communications and SNC have entered into employment agreements with
certain key executives and consulting agreements with certain former executives
that call for guaranteed minimum salaries and bonuses for varying terms.

One of SNC's U.S. subsidiaries has standby letters of credit with a bank,
secured by compensating balance arrangements, totaling $6.0 million. The
standby letters of credit renew annually and interest is charged at a rate of
1.25% per year.

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

18. Related Parties:

SNC's headquarters office space is leased from a third party, in which one of
the nonemployee directors of Snyder has a minority ownership interest. Rent
paid under this lease was $1.1 million, $2.4 million and $1.1 million in 1998,
1997 and 1996, respectively.

F-63
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

SNC produced a WallBoard(R) information display for which a publication
beneficially owned by certain nonemployee directors of Snyder Communications is
one of the sponsors. Revenues earned under this program were $2.0 million in
1997.

In December 1997, SNC entered into a software license agreement with a
company in which certain nonemployee directors of Snyder Communications are
directors and in which they own a minority interest. SNC paid approximately
$2.5 million for the license and related equipment.

19. Geographic Information:

SNC operates in one reportable segment as a provider of direct marketing,
advertising and communications services. Revenues by geographic area were as
follows:

<TABLE>
<CAPTION>
For the Years Ended
December 31,
--------------------------
1998 1997 1996
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Revenues:
United States................................. $324,477 $292,740 $253,903
Western Europe................................ 155,812 104,765 92,012
-------- -------- --------
Total....................................... $480,289 $397,505 $345,915
======== ======== ========
</TABLE>

F-64
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

20. Selected Quarterly Financial Data (unaudited, in thousands, except per
share data):

The following table summarizes financial data by quarter for SNC for 1998 and
1997, giving effect to the Acquisitions as if they had occurred at the
beginning of the earliest period presented.

<TABLE>
<CAPTION>
1998 Quarter Ended
----------------------------------------------------
March 31 June 30 September 30 December 31 Total
-------- -------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C>
Revenues................ $107,841 $115,520 $125,444 $131,484 $480,289
Gross profit............ 37,667 39,367 43,422 45,578 166,034
Income (loss) from
continuing operations.. (4,286) 10,918 14,173 557 21,362
Income (loss) from
continuing operations
per share (basic and
diluted)............... (0.06) 0.14 0.19 0.01 0.28
Income (loss) from
discontinued
operations............. (4,052) 6,670 (3,771) 2,599 1,446
Income (loss) from
discontinued operations
per share (basic and
diluted)............... (0.05) 0.09 (0.05) 0.03 0.02
Net income (loss)....... (8,338) 17,588 10,402 3,156 22,808
Net income (loss) per
share (basic and
diluted)............... (0.11) 0.23 0.14 0.04 0.30
Pro forma net income
(loss) from continuing
operations............. (6,406) 10,515 13,690 777 18,576
Pro forma net income
(loss) from continuing
operations per share
(basic and diluted).... (0.08) 0.14 0.18 0.01 0.25
Pro forma net income
(loss)................. (10,458) 17,185 9,919 3,376 20,022
Pro forma net income
(loss) per share (basic
and diluted)........... (0.14) 0.23 0.13 0.04 0.26
Pro forma income (loss)
from continuing
operations, excluding
nonrecurring
acquisition and related
costs and compensation
to stockholders........ 9,444 10,627 13,932 14,486 48,489
Pro forma income (loss)
from continuing
operations, excluding
nonrecurring
acquisition costs and
compensation to
stockholders per share
(basic and diluted)
(a).................... 0.12 0.14 0.18 0.19 0.64
<CAPTION>
1997 Quarter Ended
----------------------------------------------------
March 31 June 30 September 30 December 31 Total
-------- -------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C>
Revenues................ $ 93,123 $ 99,189 $100,369 $104,824 $397,505
Gross profit............ 30,475 33,484 32,591 30,687 127,237
Income (loss) from
continuing operations.. (9,340) 6,471 (7,687) (5,966) (16,522)
Income (loss) from
continuing operations
per share (basic and
diluted) (a)........... (0.12) 0.09 (0.10) (0.08) (0.22)
Income (loss) from
discontinued
operation.............. (336) 2,183 (11,190) (882) (10,225)
Inocme (loss) from
discontinued operations
per share (basic and
diluted) (a)........... -- 0.03 (0.15) (0.01) (0.14)
Net income (loss)....... (9,676) 8,654 (18,877) (6,848) (26,747)
Net income (loss) per
share (basic and
diluted) (a)........... (0.13) 0.11 (0.25) (0.09) (0.35)
Pro forma net income
(loss) from continuing
operations............. (10,051) 5,378 (7,950) (5,843) (18,466)
Pro forma net income
(loss) from continuing
operations per share
(basic and diluted)
(a).................... (0.13) 0.07 (0.11) (0.08) (0.24)
Pro forma net income
(loss) from
discontinued
operations............. (634) 1,909 (10,449) (2,427) (11,601)
Pro forma net income
(loss) from
discontinued operations
per share (basic and
diluted)............... (0.01) 0.03 (0.14) (0.03) (0.15)
Pro forma net income
(loss)................. (10,685) 7,287 (18,399) (8,270) (30,067)
Pro forma net income
(loss) per share (basic
and diluted) (a)....... (0.14) 0.10 (0.24) (0.11) (0.40)
Pro forma income (loss)
from continuing
operations, excluding
nonrecurring
acquisition and related
costs, ESOP expense,
and compensation to
stockholders........... 5,283 6,499 7,573 2,641 21,996
Pro forma income (loss)
from continuing
operations, excluding
nonrecurring
acquisition and related
costs, ESOP expense,
and compensation to
stockholders per share
(basic and diluted).... 0.07 0.09 0.10 0.03 0.29
</TABLE>

The pro forma amounts include a provision for federal and state income taxes
as if SNC had been a taxable C corpoation for all periods presented.

(a) The sum of these amounts does not equal the annual amount because the
quarterly calculations are based on varying numbers of shares outstanding.

F-65
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of
Brann Holdings Limited:

Price Waterhouse
Chartered Accountants and Registered Auditors

Bristol, England
May 30, 1997

F-66
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
American List Corporation

We have audited the combined balance sheet of American List Corporation and
Subsidiaries as of February 28, 1997, and the related combined statements of
earnings, stockholders' equity and cash flows for the year then ended (not
presented separately herein). These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements 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 combined financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the combined financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
combined financial statement presentation. We believe that our audit provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined financial position of American List
Corporation and Subsidiaries as of February 28, 1997, and the combined results
of their operations and their combined cash flows for the year then ended in
conformity with generally accepted accounting principles.

Grant Thornton LLP

Melville, New York
April 11, 1997

F-67
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of Snyder Communications, Inc.:

We have audited the accompanying combined balance sheets of circle.com, as
defined in Note 1 to the combined financial statements, as of December 31, 1998
and 1997, and the related combined statements of operations and cash flows for
each of the years in the three year period ended December 31, 1998. These
combined financial statements are the responsibility of Snyder Communications,
Inc.'s management. Our responsibility is to express an opinion on these
combined financial statements based on our audits.

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

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of circle.com as of
December 31, 1998 and 1997, and the results of their operations and their cash
flows for each of the years in the three year period ended December 31, 1998,
in conformity with generally accepted accounting principles.

Circle.com is a business unit of Snyder Communications, Inc. whose
consolidated financial statements are presented on pages F-2 through F-34.
Reference should be made to Note 1 of the accompanying combined financial
statements.

ARTHUR ANDERSEN LLP

Washington, D.C.
June 22, 1999

F-68
<PAGE>

CIRCLE.COM
(See Note 1)

COMBINED BALANCE SHEET
(in thousands)

<TABLE>
<CAPTION>
March 31, December 31,
----------- --------------
1999 1998 1997
----------- ------- ------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Accounts receivable, net of allowance for doubtful
accounts of $402,
$402 and $88 at March 31, 1999, December 31, 1998
and 1997, respectively........................... $ 2,426 $ 2,151 $1,086
Receivables from pass-through costs............... 2,417 2,851 816
Unbilled services................................. 427 251 --
Deferred tax asset................................ 162 162 35
Other current assets.............................. 336 275 73
------- ------- ------
Total current assets............................ 5,768 5,690 2,010
------- ------- ------
Property and equipment, net......................... 3,860 2,927 922
Goodwill, net....................................... 6,018 6,425 --
------- ------- ------
Total assets.................................... $15,646 $15,042 $2,932
======= ======= ======
LIABILITIES AND INVESTMENTS AND ADVANCES FROM SNYDER
COMMUNICATIONS
Current liabilities:
Accrued payroll................................... $ 978 $ 1,086 $ 197
Accounts payable.................................. 822 1,475 1,059
Accrued expenses.................................. 1,178 1,497 128
Unearned revenue.................................. 534 493 --
------- ------- ------
Total current liabilities....................... 3,512 4,551 1,384
------- ------- ------
Deferred tax liability.............................. 46 40 17
Commitments and contingencies
Investments and advances from Snyder
Communications..................................... 12,088 10,451 1,531
------- ------- ------
Total liabilities and investments and advances
from Snyder Communications..................... $15,646 $15,042 $2,932
======= ======= ======
</TABLE>

The accompanying notes are an integral part of this combined balance sheet.

F-69
<PAGE>

CIRCLE.COM
(See Note 1)

COMBINED STATEMENT OF OPERATIONS
(in thousands, except per share data)

<TABLE>
<CAPTION>
For the Three
Months Ended For the Years Ended December
March 31, 31,
-------------- --------------------------------
1999 1998 1998 1997 1996
------ ------ ------- ------ -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Net revenues................. $5,349 $1,743 $13,514 $5,567 $3,308
Operating expenses:
Professional services...... 3,222 921 7,114 3,044 1,960
Office and general......... 3,312 1,150 5,902 3,621 2,176
------ ------ ------- ------ ------
Income (loss) before income
taxes....................... (1,185) (328) 498 (1,098) (828)
Income tax provision
(benefit)................... (314) 4 500 (968) (588)
------ ------ ------- ------ ------
Net loss..................... (871) (332) (2) (130) (240)
------ ------ ------- ------ ------
Net loss attributable to SNC
retained interest........... (174) (66) -- (26) (48)
------ ------ ------- ------ ------
Net loss attributable to
circle.com outstanding
shares...................... $ (697) $ (266) $ (2) $ (104) $ (192)
====== ====== ======= ====== ======
Pro forma historical net loss
per share (unaudited) (see
Note 2):
Basic and diluted net loss
per share................. $ (.04) $ (.01) $ -- $ (.01) $ (.01)
====== ====== ======= ====== ======
Pro forma adjusted net income
(loss) per share (unaudited)
(see Note 2):
Basic and diluted net
income (loss) per share... $ (.04) $ (.01) $ .01 $ (.03) $ (.02)
====== ====== ======= ====== ======
Pro forma shares used in
computing net income (loss)
per share................... 18,895 18,895 18,895 18,895 18,895
====== ====== ======= ====== ======
</TABLE>

The accompanying notes are an integral part of this combined statement of
operations.

F-70
<PAGE>

CIRCLE.COM
(See Note 1)

COMBINED STATEMENT OF CASH FLOWS
(in thousands)

<TABLE>
<CAPTION>
For the
Three Months For the Years
Ended March 31, Ended December 31,
------------------ -----------------------
1999 1998 1998 1997 1996
-------- -------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
(unaudited)
Cash flows from operating
activities:
Net loss......................... $ (871) $ (332) $ (2) $ (130) $ (240)
Adjustments to reconcile net
loss to net cash
used in operating activities:
Depreciation and amortization.. 668 84 643 193 112
Deferred taxes................. 6 (1) (104) (18) --
Changes in assets and
liabilities:
Accounts receivable, net....... (275) (732) (923) (642) (444)
Receivables from pass-through
costs......................... 434 605 (870) (375) (441)
Unbilled services.............. (177) -- (229) -- --
Other current assets........... (54) (27) (8) (17) (56)
Accrued payroll, accounts
payable and accrued expenses.. (1,080) (67) 388 838 546
Unearned revenue............... 41 -- 493 (125) 125
-------- -------- ------- ------ ------
Net cash used in operating
activities.................. (1,308) (470) (612) (276) (398)
-------- -------- ------- ------ ------
Cash flows from investing
activities:
Purchase of property and
equipment....................... (1,206) (325) (2,663) (606) (612)
Purchase of subsidiaries......... -- -- (636) -- --
Cash at acquired subsidiary...... -- -- 90 -- --
-------- -------- ------- ------ ------
Net cash used in investing
activities.................. (1,206) (325) (3,209) (606) (612)
-------- -------- ------- ------ ------
Cash flows from financing
activities:
Investment and advances from
Snyder Communications, net...... 2,494 804 3,836 895 1,010
-------- -------- ------- ------ ------
Net cash provided by
financing activities........ 2,494 804 3,836 895 1,010
-------- -------- ------- ------ ------
Effect of exchange rate changes... 20 (9) (15) (13) --
Net increase (decrease) in cash
and equivalents.................. -- -- -- -- --
Cash and equivalents, beginning of
period........................... -- -- -- -- --
-------- -------- ------- ------ ------
Cash and equivalents, end of
period........................... $ -- $ -- $ -- $ -- $ --
======== ======== ======= ====== ======
Disclosure of noncash activities:
Businesses acquired with Snyder
Communications stock............ $ -- $ -- $ 5,095 $ -- $ --
</TABLE>

The accompanying notes are an integral part of this combined statement of cash
flows.

F-71
<PAGE>

CIRCLE.COM
(See Note 1)

NOTES TO COMBINED FINANCIAL STATEMENTS
(Information as of March 31, 1999 and for the three months ended March 31, 1999
and 1998 is unaudited.)

1. Organization, Basis of Presentation and Business:

Organization

Snyder Communications, Inc. ("Snyder Communications"), a Delaware
corporation, was incorporated on June 25, 1996, to continue the business
operations of Collegiate Marketing and Communications, L.P. Snyder
Communications completed an initial public offering of its common stock on
September 24, 1996.

Snyder Communications provides direct marketing, advertising, and
communications services, Internet professional services, and healthcare
marketing services to its clients.

The Board of Snyder Communications has approved, subject to stockholder
approval, a "Recapitalization Proposal" that would result in authorization of
Snyder Communications to issue two classes of stock as follows: 80 million
shares of common stock designated as "circle.com stock" and 320 million shares
of common stock designated as "SNC stock". The circle.com stock is intended to
separately track the performance of Snyder Communications' Internet
professional services business, which Snyder Communications calls "circle.com",
and the SNC stock is intended to separately track the performance of the
remaining Snyder Communications businesses and a retained interest in
circle.com, which Snyder Communications calls "SNC". Each share of existing
Snyder Communications common stock will be converted into one share of SNC
stock and .25 of a share of circle.com stock.

The SNC stock and circle.com stock constitute common stock of Snyder
Communications, and the issuance of these classes of stock will not result in
any transfer of assets or liabilities of Snyder Communications or any of its
affiliates. Snyder Communications intends to issue shares of circle.com stock
representing 80% of the equity value attributed to circle.com. The remaining
equity value attributed to circle.com will remain with SNC as its "retained
interest" in circle.com.

Basis of Presentation

The combined financial statements of circle.com and SNC comprise all of the
accounts included in the corresponding consolidated financial statements of
Snyder Communications. The separate combined financial statements give effect
to the accounting policies that will be applicable upon implementation of the
Recapitalization Proposal. The separate circle.com and SNC combined financial
statements have been prepared on a basis that management believes to be
reasonable and appropriate and reflect (1) the combined financial position,
results of operations, and cash flows of the businesses that comprise
circle.com's and SNC's respective operations, with all significant intracompany
transactions and balances eliminated, (2) in the case of the circle.com
combined financial statements, corporate assets and liabilities of Snyder
Communications and related transactions associated with or conducted by
circle.com, including allocated portions of Snyder Communications' overhead and
administrative shared services and (3) in the case of SNC's combined financial
statements, all other corporate assets and liabilities and related transactions
of Snyder Communications, including allocated portions of Snyder
Communications' overhead and administrative shared services. Intercompany
transactions between circle.com and SNC have not been eliminated in
circle.com's combined financial statements.

During the three months ended March 31, 1999, circle.com recorded $0.2
million of revenue for services provided to SNC. There were no intercompany
transactions in 1998, 1997 and 1996.

F-72
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(Information as of March 31, 1999 and for the three months ended March 31, 1999
and 1998 is unaudited.)

Holders of circle.com stock and SNC stock will be stockholders of a single
company; Snyder Communications, circle.com and SNC are not separate legal
entities. As a result, stockholders will continue to be subject to all of the
risks associated with an investment in Snyder Communications and all of its
businesses, assets, and liabilities. The issuance of circle.com stock and SNC
stock and the allocation of the assets and liabilities between circle.com and
SNC will not result in a distribution or spin-off of any assets or liabilities
of Snyder Communications and will not affect ownership of any assets or
responsibility for liabilities of Snyder Communications or any of its
subsidiaries. The assets of Snyder Communications attributed to circle.com
could be subject to the liabilities of SNC, whether such liabilities arise from
lawsuits, contracts, or indebtedness attributable to SNC. If Snyder
Communications is unable to satisfy SNC's liabilities out of assets attributed
to it, Snyder Communications may be required to satisfy these liabilities with
assets attributed to circle.com.

Financial effects arising from one group that affect Snyder Communications'
consolidated results of operations or financial condition could, if
significant, affect the results of operations or financial condition of the
other group and the market price of the common stock relating to the other
group. Any net losses of circle.com or SNC and dividends and distributions on,
or repurchases of, circle.com stock or SNC stock will reduce the funds of
Snyder Communications legally available for payment on circle.com stock.

The management and allocation policies applicable to the preparation of the
financial statements of circle.com and SNC may be modified or rescinded, or
additional policies may be adopted, at the sole discretion of the Board at any
time without approval of the stockholders. Circle.com's combined financial
statements reflect the application of the management and allocation policies
adopted by the Board, as described below. Circle.com's combined financial
statements should be read in conjunction with Snyder Communications'
consolidated financial statements.

A portion of Snyder Communications' overhead and administrative shared
services expenses have been allocated to circle.com based upon the estimated
use of services by that group. Overhead and administrative shared services
include costs of executive management, human resources, legal, accounting,
treasury and strategic planning and information technology services. Where
determinations based on estimated use alone are not practical, other methods
have been used that management believes are equitable and provide a reasonable
estimate of the costs attributable to circle.com. In the opinion of management,
the methods for allocating these costs are reasonable. The totals for these
allocations were $1.2 million for the three months ended March 31, 1999 and
$2.5 million, $1.8 million, and $1.1 million for the years ended December 31,
1998, 1997 and 1996, respectively. It is not practicable to estimate the costs
that would have been incurred by circle.com if it had been operated on a stand-
alone basis or as a separate legal entity.

Changes in investments and advances from Snyder Communications represent the
net loss of circle.com, the comprehensive income (loss) of circle.com, the net
change in cash transferred between circle.com and Snyder Communications (or
previous owners with respect to the Pooled Entities prior to their merger with
SNC) and the effect of businesses acquired by Snyder Communications in purchase
transactions and contributed to circle.com.

F-73
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(Information as of March 31, 1999 and for the three months ended March 31, 1999
and 1998 is unaudited.)

The analysis of investments and advances from Snyder Communications is as
follows (in thousands):

<TABLE>
<S> <C>
Balance, December 31, 1995.......................................... $ --
Net loss.......................................................... (240)
Cash transfers from Snyder Communications, net.................... 1,010
-------
Balance, December 31, 1996.......................................... $ 770
-------
Net loss.......................................................... (130)
Comprehensive income (loss)....................................... (4)
Cash transfers from Snyder Communications, net.................... 895
-------
Balance, December 31, 1997.......................................... $ 1,531
-------
Net loss.......................................................... (2)
Comprehensive income (loss)....................................... (9)
Noncash transfers from Snyder Communications...................... 5,095
Cash transfers from Snyder Communications, net.................... 3,836
-------
Balance, December 31, 1998.......................................... $10,451
-------
Net income (loss) (unaudited)..................................... (871)
Comprehensive income (loss) (unaudited)........................... 14
Cash transfers from Snyder Communications, net (unaudited)........ 2,494
-------
Balance, March 31, 1999 (unaudited)................................. $12,088
=======
</TABLE>

In 1998 and 1997, Snyder Communications completed acquisitions that were
accounted for as pooling of interests for financial reporting purposes. Snyder
Communications' financial statements have been retroactively restated to
reflect the combined financial position and combined results of operations and
cash flows of Snyder Communications and the pooled entities, after elimination
of all significant intercompany transactions, for all periods presented, giving
effect to the acquisitions as if they had occurred at the beginning of the
earliest period presented. A portion of these pooled entities have been
included in the combined operations of circle.com.

The following details revenues and net income (loss) for each of the years
ended December 31, 1998, 1997 and 1996 as well as the three months ended March
31, 1999 (unaudited) and March 31, 1998 (unaudited) of circle.com and the
portion of the pooled entities included in circle.com through the dates of
their respective acquisitions:

<TABLE>
<CAPTION>
For the Three Months
Ended March 31, For the Years Ended December 31,
---------------------- -----------------------------------
1999 1998 1998 1997 1996
---------- ---------- ----------- ---------- ----------
(unaudited)
(in thousands)
<S> <C> <C> <C> <C> <C>
Revenues:
circle.com............ $ 5,349 $ 1,266 $ 13,037 $ 1,219 $ --
pooled entities....... -- 477 477 4,348 3,308
---------- ---------- ----------- ---------- ----------
$ 5,349 $ 1,743 $ 13,514 $ 5,567 $ 3,308
========== ========== =========== ========== ==========
Net Income (loss):
circle.com............ $ (871) $ (46) $ 284 $ (308) $ --
pooled entities....... -- (286) (286) 178 (240)
---------- ---------- ----------- ---------- ----------
$ (871) $ (332) $ (2) $ (130) $ (240)
========== ========== =========== ========== ==========
</TABLE>

F-74
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(Information as of March 31, 1999 and for the three months ended March 31, 1999
and 1998 is unaudited.)

Business

Circle.com is a provider of Internet professional services that create
Internet-based customer relationship management systems for its clients to
identify, acquire and retain customers. Circle.com's operations are conducted
in the United States and the United Kingdom.

There are important risks associated with circle.com's business and financial
results. Circle.com has experienced operating losses since it began operations
and may not generate sufficient revenue from operations in the future. If
circle.com fails to generate sufficient cash from operations, management will
need to identify other sources of funds, including Snyder Communications.
Available sources of financing may not be on terms that are favorable or
reasonable from management's perspective. Other risks include: (i) competitors
with capabilities and resources equal to or greater than circle.com; (ii)
potential competition between SNC and circle.com; (iii) the ability to recruit
and retain qualified personnel; (iv) reliance on significant clients (See Note
2); (v) dependency on industry trends toward Internet usage; (vi) potential
adverse effects of fluctuations in foreign exchange rates; (vii) the ability to
sustain and manage future growth; (viii) the ability to keep pace with rapid
changes in communications technologies; and (ix) the risks associated with
circle.com's reliance on technology and the risk of business interruption
resulting from a temporary or permanent loss of such technology.

Unaudited Pro Forma Information

During 1998, Snyder Communications completed several purchase business
combinations for total consideration paid of approximately $5.7 million
(152,411 shares of Snyder Communications common stock and $636,000 in cash).
Based upon an allocation of purchase consideration, these purchase business
combinations have resulted in goodwill of approximately $6.6 million.

In June 1999, Snyder Communications completed purchase business combinations
including Tsunami Consulting Group, Inc. and Natural Intelligence, Inc. for
total consideration paid of approximately $28.0 million and $6.8 million,
respectively (844,499 shares of Snyder Communications common stock and
$13.3 million in cash). Upon the effectiveness of the Recapitalization
Proposal, the majority of the Snyder Communications shares issued in these
acquisitions will be exchanged for circle.com stock at an agreed upon value.
These purchase business combinations have resulted in a preliminary allocation
to goodwill of approximately $26.9 million and $6.3 million, respectively,
which will be amortized over 4 years. Each of these acquired businesses
constitute a part of circle.com's business.

The following table presents pro forma financial information as if the 1998
and 1999 purchases had been consummated at the beginning of each of the periods
presented and all of circle.com's operations had been taxed as a C corporation.

<TABLE>
<CAPTION>
For the Years
For the Three Months Ended December
Ended March 31, 31,
-------------------- ----------------
1999 1998 1998 1997
---------- ---------- ------- -------
(unaudited) (unaudited)
(in thousands)
----------------------------------------
<S> <C> <C> <C> <C>
Pro forma revenues.................... $ 7,750 $ 4,520 $24,401 $12,389
Pro forma net loss.................... (2,564) (2,801) (9,129) (9,468)
</TABLE>

Unaudited Interim Financial Statements

The accompanying unaudited combined balance sheet as of March 31, 1999 and
the combined statements of operations and cash flows for the three months ended
March 31, 1999 and March 31, 1998 have been prepared without audit. Certain
information and footnote disclosures normally included in financial statements
presented in accordance with generally accepted accounting principles have been
omitted. Snyder Communications believes the

F-75
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(Information as of March 31, 1999 and for the three months ended March 31, 1999
and 1998 is unaudited.)

disclosures made are adequate to make the information presented not misleading.
In the opinion of Snyder Communications, the accompanying unaudited combined
financial statements reflect all adjustments, including only normal recurring
adjustments, necessary to present fairly the financial position of circle.com
at March 31, 1999 and the results of operations and cash flows for the three
months ended March 31, 1999 and March 31, 1998.

2. Summary of Significant Accounting Policies:

Receivables From Pass-Through Costs

Receivables from pass-through costs relate to services purchased from third
parties, principally media placement costs, on behalf of clients, for which no
revenue is recorded.

Property and Equipment

Property and equipment is stated at cost. Depreciation of furniture, fixtures
and office and telephone equipment is on a straight-line basis over three to
ten years; and computer equipment over two to four years. Leasehold
improvements are amortized on a straight-line basis over the shorter of the
term of the lease or the estimated useful lives of the improvements.

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

Revenue Recognition

Revenues from Internet professional services are recognized based on the
nature of the contract. Revenue from fixed price contracts is recognized using
the percentage-of-completion method based on the ratio of costs incurred to
total estimated costs. Revenue from time-and-materials contracts is recognized
as time and expenses are incurred. Unbilled services represents revenues earned
but billed in a subsequent accounting period. Amounts billed to clients in
excess of revenues recognized to date are classified as unearned revenue.

Goodwill

Goodwill equal to the fair value of consideration paid in excess of the fair
value of net assets purchased has been recorded in conjunction with
circle.com's purchase business combinations and is being amortized on a
straight-line basis over periods of four to five years.

Income Taxes

Federal and state income tax provisions and related tax payments or refunds
are allocated between circle.com and SNC based principally on the taxable
income and tax credits directly attributable to each group. Such allocations
reflect each group's contribution, whether positive or negative, to Snyder
Communications' consolidated federal taxable income and the consolidated
federal tax liability and tax credit position. Tax benefits that cannot be used
by the group generating those benefits but can be used on a consolidated basis
are credited to the group that generated such benefits. Accordingly, the
amounts of taxes payable or refundable allocated to each group may not
necessarily be the same as that which would have been payable or refundable had
each group filed a separate income tax return.

F-76
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(Information as of March 31, 1999 and for the three months ended March 31, 1999
and 1998 is unaudited.)

Depending on the tax laws of the respective jurisdictions, foreign, state and
local income taxes are calculated on either a consolidated or combined basis or
on a separate corporation basis. State income tax provisions and related tax
payments or refunds are allocated between the groups based on their respective
contributions to such consolidated or combined state taxable incomes. State and
local income tax provisions and related payments which are determined on a
separate subsidiary basis are allocated between the groups in a manner designed
to reflect the respective contributions of the groups to the subsidiary's
separate foreign, state or local taxable income.

Deferred income taxes are reflected separately on the balance sheet of
circle.com. Current taxes payable and receivable from Snyder Communications are
included in net investments and advances from Snyder.

Prior to their merger with Snyder Communications, certain of the U.S.-based
pooled entities were treated as S corporations or limited liability companies
for income tax purposes. Accordingly, no provision for federal or state income
taxes, except in certain states that do not recognize S corporations or limited
liability companies, has been made for these entities through the date of their
mergers within the accompanying combined financial statements.

Unaudited Pro Forma Adjusted Income (Loss) Data

The unaudited pro forma adjusted net income (loss) amounts include a
provision for federal and state income taxes as if circle.com had been a
taxable C corporation for all periods presented. The pro forma income tax rate
reflects the combined federal, state and foreign income taxes of approximately
75.3%, 32.5% and 34.2%, for the years ended December 31, 1998, 1997 and 1996,
respectively.

The table below presents the calculation of pro forma net income (loss):

<TABLE>
<CAPTION>
For the Three Months For the Years Ended
Ended March 31, December 31,
----------------------- -----------------------
1999 1998 1998 1997 1996
----------- ---------- ----- -------- ------
(unaudited) (unaudited)
(in thousands)
<S> <C> <C> <C> <C> <C>
Historical income (loss)
before income taxes.... $ (1,185) $ (328) $ 498 $ (1,098) $ (828)
Pro forma (provision)
benefit for income
taxes.................. 314 121 (375) 357 283
----------- --------- ----- -------- ------
(871) (207) 123 (741) (545)
----------- --------- ----- -------- ------
Net income (loss)
attributable to SNC
retained interest...... (174) (41) 25 (148) (109)
----------- --------- ----- -------- ------
Pro forma adjusted net
income (loss).......... $ (697) $ (166) $ 98 $ (593) $ (436)
=========== ========= ===== ======== ======
</TABLE>

Accounting for Stock Options

Following the implementation of the Recapitalization Proposal, circle.com
will account for its stock-based compensation plan using the intrinsic value
based method in accordance with the provisions of APB Opinion No. 25,
"Accounting for Stock Issued to Employees." Pro forma disclosure will be made
of net income and earnings per share, calculated as if circle.com accounted for
its stock-based compensation plan using the fair value based method in
accordance with the provisions of Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation" ("SFAS No. 123").

Foreign Currency Translations

Assets and liabilities of circle.com's foreign operations are translated
using the exchange rate in effect at the balance sheet date. Revenue and
expense accounts for these operations are translated using the average exchange
rate during the period. Foreign currency translation adjustments are reported
as comprehensive income (loss) and included as a component of investments and
advances from Snyder Communications.

F-77
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(Information as of March 31, 1999 and for the three months ended March 31, 1999
and 1998 is unaudited.)

Estimates and Assumptions

Fair Value of Financial Instruments

Concentration of Credit Risk

Concentration of credit risk is limited to cash and equivalents, accounts
receivable and unbilled services. Collateral or other security to support
clients' receivables is not required.

Circle.com had clients in the years ended December 31, 1998, 1997, and 1996
which accounted for a significant percentage of revenue as follows:

For the period ended March 31, 1999, no single client represented greater
than 9.0% of revenue.

Unaudited Pro forma Net Income (Loss) Per Share

Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
("SFAS No. 128") has been applied to all periods presented in these financial
statements. SFAS No. 128 requires disclosure of basic and diluted EPS. Basic
EPS is computed by dividing reported earnings available to common stockholders
by the weighted average number of shares outstanding without consideration of
common stock equivalents or other potentially dilutive securities. Diluted EPS
gives effect to common stock equivalents and other potentially dilutive
securities outstanding during the period. For all periods presented basic EPS
has been computed using the shares of circle.com stock that will be issued upon
implementation of the Recapitalization Proposal based on the number of
outstanding shares of Snyder Communications common stock on June 22, 1999.
Basic and diluted EPS are the same for all years presented as there will be no
circle.com options granted until the Recapitalization Proposal becomes
effective.

New Accounting Pronouncements

During 1998, circle.com adopted Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income" ("SFAS No. 130"). Included within
accumulated other comprehensive income (loss) are the cumulative amounts for
foreign currency translation adjustments. The cumulative foreign currency
translation adjustment was $13,000 and $4,000 as of December 31, 1998 and 1997,
respectively.

F-78
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(Information as of March 31, 1999 and for the three months ended March 31, 1999
and 1998 is unaudited.)

During 1998, Snyder Communications adopted Statement of Finacial Accounting
Standards No. 131, "Disclosures About Segments of an Enterprise and Related
Information" ("SFAS No. 131"). Circle.com operates in one reportable segment as
a provider of internet professional services. The geographic information
required by SFAS No. 131 is disclosed in Note 10.

3. Property and Equipment:

Property and equipment consist of the following:
<TABLE>
<CAPTION>
As of December 31,
--------------------
1998 1997
---------- --------
(in thousands)
<S> <C> <C>
Computers and equipment................................ $ 3,829 $ 981
Leasehold improvements................................. 275 235
Furniture and fixtures................................. 87 11
---------- --------
Accumulated depreciation............................... (1,264) (305)
---------- --------
$ 2,927 $ 922
========== ========
</TABLE>

Depreciation expense totaled $0.5 million, $0.2 million, and $0.1 million in
1998, 1997 and 1996, respectively.

4. Goodwill:

Goodwill consists of the following:
<TABLE>
<CAPTION>
As of
December 31, 1998
------------------
(in thousands)
<S> <C>
Goodwill.................................................. $ 6,559
Accumulated amortization.................................. (134)
-------
$ 6,425
=======
</TABLE>

Amortization expense of goodwill totaled $0.1 million in 1998 and $0 in 1997
and 1996.

5. Income Taxes:

Circle.com's income tax provision (benefit) includes the following
components:

<TABLE>
<CAPTION>
For the Years Ended
December 31,
---------------------
1998 1997 1996
----- ------ ------
(in thousands)
<S> <C> <C> <C>
Current:
U.S.--Federal....................................... $ 635 $ (610) $ (433)
U.S.--State and city................................ 175 (169) (123)
Foreign............................................. (206) (162) (19)
----- ------ ------
604 (941) (575)
----- ------ ------
Deferred:
U.S.--Federal....................................... (97) (17) (10)
U.S.--State and city................................ (27) (7) (3)
Foreign............................................. 20 (3) --
----- ------ ------
(104) (27) (13)
----- ------ ------
Income tax provision (benefit)...................... $ 500 $ (968) $ (588)
===== ====== ======
</TABLE>

F-79
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(Information as of March 31, 1999 and for the three months ended March 31, 1999
and 1998 is unaudited.)

The provision (benefit) for taxes on income differs from the amount computed
by applying the U.S. federal income tax rate as a result of the following:

<TABLE>
<CAPTION>
For the Years
Ended December 31,
----------------------
1998 1997 1996
------ ----- -----
<S> <C> <C> <C>
Taxes at statutory U.S. federal income tax rate... 35.0% 35.0% 35.0%
Income taxed directly to owners................... 24.9 55.6 36.8
State and city income taxes, net of federal tax
benefit.......................................... 15.7 3.2 5.1
Foreign tax rate differential..................... 4.8 (0.9) (0.1)
Goodwill amortization............................. 10.4 -- --
Acquisition costs and other permanent
differences...................................... 9.6 (4.7) (5.8)
------ ----- -----
Effective tax rate................................ 100.4% 88.2% 71.0%
====== ===== =====
</TABLE>

<TABLE>
<CAPTION>
As of December 31,
---------------------
1998 1997
--------- ---------
(in thousands)
<S> <C> <C>
Reserve for doubtful accounts....................... $ 162 $ 35
Valuation allowance ................................ -- --
--------- ---------
Gross deferred tax asset............................ 162 35
--------- ---------
Property and equipment.............................. (40) (17)
--------- ---------
Gross deferred tax liabilities...................... (40) (17)
--------- ---------
Net deferred tax asset.............................. $ 122 $ 18
========= =========
</TABLE>

Management continually assesses whether the Company's deferred tax asset is
realizable and believes that the deferred tax asset is realizable at December
31, 1998.

6. Common Stock:

Under the terms of the Recapitalization Proposal, holders of SNC stock and
circle.com stock generally will not have stockholder rights specific to their
corresponding groups. Instead, holders will have customary stockholder rights
relating to Snyder Communications as a whole. If Snyder Communications sells
all or substantially all of the assets attributed to circle.com, Snyder
Communications must either: (1) pay a dividend to holders of circle.com stock
equal to a proportionate interest in the net proceeds of that sale; (2) redeem
outstanding shares of circle.com stock from their holders for an amount equal
to a proportionate interest in the net proceeds of that sale; or (3) issue SNC
stock in exchange for outstanding circle.com stock at a premium to the value of
the circle.com stock being exchanged. Snyder Communications will not be
required to do any of the above if: (1) the sale is in connection with the
liquidation of Snyder Communications; (2) the sale is a spin-off of circle.com
to the holders of circle.com stock; (3) the sale is to a person or entity
controlled by Snyder Communications; or (4) the sale results in Snyder
Communications receiving primarily equity securities of any entity that
acquires the assets and is primarily engaged in a business similar or
complementary to the business engaged in by circle.com.

F-80
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(Information as of March 31, 1999 and for the three months ended March 31, 1999
and 1998 is unaudited.)

At any time, Snyder Communications may convert the circle.com stock into SNC
stock at a premium.
If there are adverse U.S. federal income tax law developments, Snyder
Communications may convert the circle.com stock without any premium. Snyder
Communications may redeem this stock for stock of one of the subsidiaries that
holds all of the assets and liabilities attributed to circle.com. Holders will
share assets remaining for distribution to holders of common stock on a per
share basis in proportion to the liquidation units per share.

7. Stock Plans:

Amended and Restated Stock Incentive Plan

Upon approval by the Snyder Communications stockholders, the Second Amended
and Restated Stock Incentive Plan (the "Amended Stock Plan") will become
effective upon the Proposed Recapitalization. The Amended Stock Plan authorizes
Snyder Communications to grant incentive stock options, nonqualified stock
options, restricted stock awards and SARs based on circle.com stock and SNC
stock.

If the Recapitalization Proposal and related stock incentive plan proposal
are approved and implemented, outstanding awards previously granted under the
stock incentive plan based upon shares of existing Snyder Communications common
stock will be adjusted so that each holder of an outstanding award will receive
a corresponding award based upon shares of SNC stock and circle.com stock. Each
outstanding option to purchase a share of existing common stock held by a
circle.com employee will be converted into an option to purchase shares of
circle.com stock. Each outstanding option to purchase a share of existing
common stock held by an SNC employee will be converted into an option to
purchase shares of SNC stock. Each outstanding option to purchase a share of
existing common stock held by directors and certain corporate level officers
and employees of Snyder Communications will be converted into an option to
purchase shares of SNC stock and circle.com stock. In each case, the exercise
prices of such options will be adjusted in order to maintain the economic
position of option holders upon implementation of the Recapitalization
Proposal. The aggregate intrinsic value of the options outstanding and the
ratio of the exercise price per option to the market value per share will not
change.

8. Pension and Profit-Sharing Plans:

A portion of the costs of the pension and profit sharing plans maintained by
Snyder Communications has been allocated to circle.com. Circle.com's pension
and profit sharing costs related to these plans amounted to approximately
$48,000, $249,000, and $136,000 for the years ended December 31, 1998, 1997 and
1996, respectively.

9. Commitments and Contingencies:

Snyder Communications has entered into employment agreements with certain key
executives that call for guaranteed minimum salaries and bonuses for varying
terms and grants of options and restricted stock in circle.com.

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

F-81
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(Information as of March 31, 1999 and for the three months ended March 31, 1999
and 1998 is unaudited.)

Circle.com leases certain facilities. The following is a schedule of future
minimum lease payments for operating leases with initial or remaining terms in
excess of one year at December 31, 1998 (in thousands):

<TABLE>
<CAPTION>
Years ending December 31,
-------------------------
<S> <C>
1999................................................................. $1,609
2000................................................................. 1,681
2001................................................................. 1,719
2002................................................................. 1,758
2003................................................................. 1,804
Thereafter........................................................... 8,205
-------
Total minimum lease payments......................................... $16,776
=======
</TABLE>

Rental expense for all operating leases was approximately $0.4 million, $0.2
million and $0.1 million for the years ended December 31, 1998, 1997, and 1996,
respectively.

10. Geographic Information:

Circle.com operates in one reportable segment as a provider of Internet
professional services. Revenues by geographic area were as follows:

<TABLE>
<CAPTION>
For the years ended
December 31,
--------------------------
1998 1997 1996
-------- ------- -------
(in thousands)
<S> <C> <C> <C>
Revenues:
United States.................................. $11,251 $4,034 $2,294
United Kingdom................................. 2,263 1,533 1,014
-------- ------- -------
Total........................................ $13,514 $5,567 $3,308
======== ======= =======
</TABLE>

F-82
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of Snyder Communications, Inc.:

We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements of Snyder Communications, Inc. included in
this Form S-4 and have issued our report thereon dated June 22, 1999. Our
audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. Schedule II Valuation and
Qualifying Accounts included in the Form S-4 is the responsibility of the
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
consolidated financial statements. This schedule has been subjected to the
auditing procedures applied in the audits of the basic consolidated financial
statements and, in our opinion, based on our audits and the reports of other
auditors, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic consolidated financial statements
taken as a whole.

ARTHUR ANDERSEN LLP

Washington, D.C.
June 22, 1999

S-1
<PAGE>

SNYDER COMMUNICATIONS, INC.

SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
(In thousands)

<TABLE>
<CAPTION>
Balance at Additions Charged Deductions from Reserve
Beginning of to Cost and for Purpose for Which Translation Balance at
Year Expense Reserve was Created Adjustment End of Year
------------ ----------------- ----------------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1998 allowance for
doubtful accounts...... $ 3,893 $ 3,775 $ 731 $ 94 $ 7,031
1997 allowance for
doubtful accounts...... 2,001 3,191 1,430 131 3,893
1996 allowance for
doubtful accounts...... 1,400 1,018 479 62 2,001
<CAPTION>
Balance at Additions Charged Deductions from Reserve
Beginning of to Cost and for Purpose for Which Translation Balance at
Year Expense Reserve was Created Adjustment End of Year
------------ ----------------- ----------------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1998 accrual for
integration
activities............. $ -- $ 2,625 $ 305 $ -- $ 2,320
1997 accrual for
integration
activities............. -- -- -- -- --
1996 accrual for
integration
activities............. -- -- -- -- --
</TABLE>

S-2
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of Snyder Communications, Inc.:

We have audited in accordance with generally accepted auditing standards, the
combined financial statements of SNC, as defined in Note 1 to the combined
financial statements, included in this Form S-4 and have issued our report
thereon dated June 22, 1999. Our audits were made for the purpose of forming an
opinion on the basic combined financial statements taken as a whole. Schedule
II Valuation and Qualifying Accounts included in the Form S-4 is the
responsibility of Snyder Communications, Inc.'s management and is presented for
purposes of complying with the Securities and Exchange Commission's rules and
is not part of the basic combined financial statements. This schedule has been
subjected to the auditing procedures applied in the audits of the basic
combined financial statements and, in our opinion, based on our audits and the
reports of other auditors, fairly states in all material respects the financial
data required to be set forth therein in relation to the basic combined
financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Washington, D.C.
June 22, 1999

S-3
<PAGE>

SNC
(See Note 1 to the Combined Financial Statements)

SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
(In thousands)

<CAPTION>
Balance at Additions Charged Deductions from Reserve
Beginning of to Cost and for Purpose for Which Translation Balance at
Year Expense Reserve was Created Adjustment End of Year
------------ ----------------- ----------------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1998 accrual for
integration
activities............. $ -- $2,625 $ 305 $ -- $2,320
1997 accrual for
integration
activities............. -- -- -- -- --
1996 accrual for
integration
activities............. -- -- -- -- --
</TABLE>

S-4
<PAGE>

To the Stockholders of Snyder Communications, Inc.:

We have audited in accordance with generally accepted auditing standards, the
combined financial statements of circle.com, as defined in Note 1 to the
combined financial statements, included in this Form S-4 and have issued our
report thereon dated June 22, 1999. Our audits were made for the purpose of
forming an opinion on the basic combined financial statements taken as a whole.
Schedule II Valuation and Qualifying Accounts included in the Form S-4 is the
responsibility of Snyder Communications, Inc.'s management and is presented for
purposes of complying with the Securities and Exchange Commission's rules and
is not part of the basic combined financial statements. This schedule has been
subjected to the auditing procedures applied in the audits of the basic
combined financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic combined financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Washington, D.C.
June 22, 1999

S-5
<PAGE>

CIRCLE.COM
(See Note 1)

SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
(in thousands)

<TABLE>
<CAPTION>
Balance at Additions Deductions from Reserve Balance
Beginning Charged to Cost for Purpose for Which at End of
of Year and Expense Reserve was Created Year
---------- --------------- ----------------------- ---------
<S> <C> <C> <C> <C>
1998 allowance for
doubtful accounts...... $88 $314 $ -- $402
1997 allowance for
doubtful accounts...... 2 86 -- 88
1996 allowance for
doubtful accounts...... -- 2 -- 2
</TABLE>

S-6
<PAGE>

ANNEX A

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
SNYDER COMMUNICATIONS, INC.
(Originally Incorporated June 24, 1996)

ARTICLE I

Name

The name of the corporation is Snyder Communications, Inc. (the
"Corporation").

ARTICLE II

Address of Registered Office;
Name of Registered Agent

The address of the registered office of the Corporation in the State of
Delaware is 1013 Centre Road, in the City of Wilmington, County of New Castle,
Delaware 19801. The name of its registered agent at that address is Corporation
Service Company.

ARTICLE III

Purpose

The purpose or purposes for which the Corporation is organized are to engage
in any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware as from time to time amended
(the "Corporation Law").

ARTICLE IV

Powers

The Corporation shall have all powers that may now or hereafter be lawful for
a corporation to exercise under the Corporation Law.

ARTICLE V

Section 1. Authorization. The aggregate number of shares of stock which the
Corporation shall have authority to issue is four hundred and five million
(405,000,000) shares, of which three hundred twenty million (320,000,000)
shares shall be shares of a class of common stock designated as "SNC Common
Stock," having a par value of $0.001 per share (the "SNC Stock"), eighty
million (80,000,000) shares shall be shares of a class of common stock
designated as "circle.com Common Stock," having a par value of $0.001 per share
(the "circle.com Stock"), and five million (5,000,000) shares shall be shares
of a class of preferred stock having a par value of $0.001 per share (the
"Preferred Stock") and issuable in one or more series as hereinafter provided.
The SNC Stock and the circle.com Stock shall hereinafter collectively be called
the "Common Stock" and each individually shall be called a "class of Common
Stock." Certain capitalized terms used in this Article V shall have the
meanings set forth in subsection 2.7 of this Article. For purposes of this
Article V, the circle.com Stock, when issued, shall be considered attributable
to circle.com and the SNC Stock, when any shares of circle.com Stock or any
Convertible Securities convertible into or exchangeable or exercisable for
circle.com Stock has been issued and is outstanding, shall be considered
attributable to SNC.

1.1 Changes in Authorized Shares of Capital Stock. Subject to subsection
2.2.4, the number of authorized shares of any class or classes of capital stock
of the Corporation may be increased or decreased (but not below the number of
shares thereof then outstanding) by the affirmative vote of the holders of a
majority of the stock of the Corporation generally entitled to vote in the
election of directors.

A-1
<PAGE>

Section 2. Common Stock. The voting powers and relative, participating,
optional or other special rights of the Common Stock, and the qualifications
and restrictions thereon, shall be as follows in this Section 2.

2.1 Dividends. Subject to any preferences and relative, participating,
optional or special rights of any outstanding series of Preferred Stock and
any qualifications or restrictions on the Common Stock or any class thereof
created thereby, dividends may be declared and paid upon the shares of a class
of Common Stock, upon the terms, and subject to the limitations provided for
below in this subsection 2.1, as the Board of Directors of the Corporation
(the "Board" or the "Board of Directors") may from time to time determine.

2.1.1. Limitation on Dividends on SNC Stock. Dividends on SNC Stock may
be declared and paid when, as and if declared by the Board out of assets
legally available for the payment of dividends, provided that the amount of
dividends payable on the SNC Stock shall not exceed the Available Dividend
Amount of SNC.

2.1.2. Limitation on Dividends on circle.com Stock. Dividends on
circle.com Stock may be declared and paid (and corresponding amounts may be
transferred to SNC in respect of its retained interest in circle.com) when,
as and if declared by the Board out of assets legally available for the
payment of dividends, provided that the amount of dividends payable (and
the corresponding amounts transferred to SNC) on the circle.com Stock shall
not exceed the Available Dividend Amount of circle.com.

2.1.3. Discrimination in Dividends Between Classes of Common Stock. The
Board of Directors, subject to the provisions of subsections 2.1.1 and
2.1.2, may at any time declare and pay dividends exclusively on SNC Stock,
exclusively on circle.com Stock or on both such classes of stock in equal
or unequal amounts, notwithstanding the relative amount available for
dividends on either class of Common Stock, the amount of dividends
previously declared on either class of Common Stock, the respective voting
or liquidation rights of either class of Common Stock or any other rights
or privileges of either class of Common Stock.

2.1.4. Share Distributions. Except as permitted by subsections 2.4.1 and
2.4.2, the Board of Directors may declare and pay dividends or
distributions on shares of Common Stock or Convertible Securities in shares
of Common Stock or Convertible Securities or shares of Preferred Stock that
are not Convertible Securities but that are attributable to a Group as
provided by subsection 3.3 only as follows:

(A) dividends or distributions of shares of SNC Stock (or Convertible
Securities convertible into or exchangeable or exercisable for shares of
SNC Stock) may be paid on shares of SNC Stock or on shares of Preferred
Stock attributable to SNC as provided by subsection 3.3;

(B) dividends or distributions of shares of circle.com Stock (or
Convertible Securities convertible into or exchangeable or exercisable for
shares of circle.com Stock) may be paid on shares of circle.com Stock or on
shares of Preferred Stock attributable to circle.com as provided by
subsection 3.3;

(C) dividends or distributions of shares of SNC Stock (or Convertible
Securities convertible into or exchangeable or exercisable for shares of
SNC Stock) on shares of circle.com Stock or on shares of Preferred Stock
attributable to circle.com as provided by subsection 3.3 may be paid
provided that such dividend or distribution has been approved by the
affirmative vote of holders of a majority of the shares of SNC Stock
outstanding; and

(D) dividends or distributions of shares of circle.com Stock (or
Convertible Securities convertible into or exchangeable or exercisable for
shares of circle.com Stock) may be paid on shares of SNC Stock or on shares
of Preferred Stock attributable to SNC as provided by subsection 3.3, if
such dividend or distribution has been approved by the affirmative vote of
the holders of a majority of the shares of circle.com Stock outstanding.

A-2
<PAGE>

2.2 Voting Powers.

2.2.1. Power to Vote Generally and Votes Per Share. Except as otherwise
provided by law or by the terms of any outstanding series of Preferred
Stock or any provision of this Restated Certificate of Incorporation (as
the same may from time to time be amended, the "Restated Certificate of
Incorporation") restricting the power to vote on a specified matter to
other stockholders, the entire voting power of the stockholders of the
Corporation shall be vested in the holders of Common Stock of the
Corporation, who shall be entitled to vote on any matter on which the
holders of stock of the Corporation shall, by law or by the provisions of
this Restated Certificate of Incorporation or by-laws of the Corporation,
be entitled to vote, and each class of Common Stock shall vote thereon
together as though one class. On each matter to be voted on by the holders
of all classes of Common Stock voting together as one class, (i) each
outstanding share of SNC Stock shall have one vote and (ii) each
outstanding share of circle.com Stock shall have a number of votes
(including a fraction of one vote) determined from time to time as provided
below.

(A) With respect to any vote to be taken during the calendar quarter in
which the circle.com Stock is initially issued, a share of circle.com Stock
will have the vote per share determined by the ratio of (i) the average
Market Capitalization of the circle.com Stock for the period beginning on
the date of initial issuance of the circle.com Stock to the record date for
determining the stockholders entitled to vote to (ii) the average Market
Capitalization of the SNC Stock over the same period.

(B) After the end of the first calendar quarter following the initial
issuance of the circle.com Stock and continuing to the end of the calendar
year in which the circle.com Stock is initially issued, the circle.com
Stock will have the vote per share determined as of the last day of the
most recently completed calendar quarter (and remaining fixed for the
remainder of that quarter) by the ratio of (i) the average Market
Capitalization of the circle.com Stock over the Trading Days of the most
recently completed calendar quarter or quarters to (ii) the average Market
Capitalization of the SNC Stock over the same period.

(C) After the end of the calendar year in which the circle.com Stock is
initially issued, the circle.com Stock will have the vote per share
determined annually as of the first day of each year (and remaining fixed
for the remainder of that year) by the ratio of (i) the average Market
Capitalization of the circle.com Stock over the trading period of the
previous four quarters (or lesser period that has elapsed since the initial
issuance of the circle.com Stock) to (ii) the average Market Capitalization
of the SNC Stock over the same period.

2.2.2. Class Vote of circle.com Stock. The holders of circle.com Stock,
voting as a separate class, shall be entitled to approve by the affirmative
vote of the holders of a majority of the outstanding shares any amendment,
alteration or repeal of any provision of the Corporation's certificate of
incorporation which adversely affects the rights, powers or privileges of
the circle.com Stock.

2.2.3. Class Vote of SNC Stock. The holders of SNC Stock, voting as a
separate class, shall be entitled to approve by the affirmative vote of the
holders of a majority of the outstanding shares any amendment, alteration
or repeal of any of the provisions of the Corporation's certificate of
incorporation which adversely affects the rights, powers or privileges of
the SNC Stock.

2.2.4. Class Vote to Increase Authorized Shares. Subject to subsection
2.5.3, any increase in the number of authorized shares of circle.com Stock
or SNC Stock shall be subject to approval by both (i) the affirmative vote
of the holders of a majority of the voting power of both the SNC Stock and
the circle.com Stock voting together as a single class (as provided by
subsection 2.2.1 above) and (ii) the affirmative vote of the holders of a
majority of the shares of circle.com Stock or SNC Stock outstanding, as
applicable, voting as a separate class.

2.2.5. One Vote Per Share. Notwithstanding the foregoing provisions of
this subsection 2.2, if shares of only one class of Common Stock are
outstanding on the date for determining the stockholders entitled to vote
on any matter, then each share of that class shall be entitled to one vote
and, if any class of Common Stock is entitled by law to vote as a separate
class with respect to any matter, each share of that class shall, for
purpose of such class vote, be entitled to one vote on such matter.

A-3
<PAGE>

2.3 Liquidation Rights. In the event of the voluntary or involuntary
dissolution of the Corporation or the liquidation and winding up of the
Corporation, after payment or provision for payment of the debts and other
liabilities of the Corporation and the full preferential amounts (including
any accumulated and unpaid dividends) to which the holders of Preferred Stock
are entitled (regardless of the Group to which such shares of Preferred Stock
were attributable in accordance with this Article V, unless otherwise provided
in respect of a series of Preferred Stock by the resolution of the Board of
Directors fixing the liquidation rights and preferences of such series of
Preferred Stock), the holders of the outstanding shares of Common Stock shall
be entitled to receive the remaining assets of the Corporation, whether the
assets were attributable to circle.com or SNC, divided among the holders of
Common Stock in accordance with the per share "Liquidation Units" attributable
to each class of Common Stock. Each share of SNC Stock is hereby attributed
one "Liquidation Unit" and each share of circle.com Stock is hereby attributed
of a "Liquidation Unit," subject to adjustment as determined by the Board
of Directors to be appropriate to reflect equitably any subdivision (by stock
split or otherwise) or combination (by reverse stock split or otherwise) of
such class of Common Stock or any dividend or other distribution of shares of
such class of Common Stock to holders of shares of such class of Common Stock.
Neither the merger or consolidation of the Corporation into or with any other
company, nor the merger or consolidation of any other company into or with the
Corporation, nor a sale, transfer or lease of all or any part of the assets of
the Corporation, shall, alone, be deemed a liquidation or winding up of the
Corporation, or cause the dissolution of the Corporation, for purposes of this
subsection 2.3.

2.4 Conversion or Redemption of Common Stock. Shares of Common Stock are
subject to conversion or redemption, as the case may be, upon the terms
provided below in this subsection 2.4 with respect to such class of Common
Stock; provided, however, that neither class of Common Stock may be converted
or redeemed if the other class has been converted or redeemed in its entirety
or notice thereof shall have been given as required by this subsection 2.4.

2.4.1. Conversion or Redemption of circle.com Stock.

(A) In the event of the Disposition, in one transaction or a series of
related transactions, by the Corporation and/or its subsidiaries, of All or
Substantially All of the Assets attributed to circle.com to one or more
persons or entities (other than (1) the Disposition by the Corporation of
such assets in one transaction or a series of related transactions in
connection with the dissolution or the liquidation and winding up of the
Corporation and the distribution of assets to stockholders as referred to
in subsection 2.3, (2) the Disposition of such assets as contemplated by
subsection 2.4.3 or otherwise to all holders of shares of circle.com Stock
and to the Corporation or subsidiaries thereof, divided among such holders
and the Corporation or subsidiaries thereof on a pro rata basis in
accordance with the number of shares of circle.com Stock outstanding and
the Number of Shares Issuable With Respect to SNC's Retained Interest in
circle.com, (3) to any person or entity controlled (as determined by the
Board of Directors) by the Corporation or (4) pursuant to a Related
Business Transaction), the Corporation shall, on or prior to the 85th
Trading Day after the date on which such Disposition was consummated (the
"Disposition Date"), pay a dividend on the circle.com Stock or redeem some
or all of the circle.com Stock or convert some or all of the circle.com
Stock into SNC Stock, all as provided by the following subparagraphs (1)
and (2) of this paragraph (A) and, to the extent applicable, by subsection
2.4.5, as the Board of Directors shall have selected among such
alternatives:

(1) provided that there are funds of the Corporation legally
available therefor:

(a) pay to the holders of the shares of circle.com Stock a
dividend, as the Board of Directors shall have declared in
compliance with subsection 2.1.2, in cash and/or in securities
(other than a dividend of SNC Stock) or other property (or
combination thereof) having a Fair Value as of the Disposition Date
equal to each holder's Proportionate Interest in the Net Proceeds of
the Disposition; or

A-4
<PAGE>

(b) (i) subject to the last sentence of this paragraph (A), redeem
as of the Redemption Date provided by paragraph (C) of subsection
2.4.5 all outstanding shares of circle.com Stock in exchange for
cash and/or for securities (other than SNC Stock) or other property
(or a combination thereof) having a Fair Value as of the Disposition
Date equal to each holder's Proportionate Interest in the Net
Proceeds of the Disposition; or

(ii) subject to the last sentence of this paragraph (A), if such
Disposition involves substantially all (but not all) of the
properties and assets attributed to circle.com, redeem as of the
Redemption Date provided by paragraph (D) of subsection 2.4.5 such
number of whole shares of circle.com Stock (which may be all of such
shares outstanding) having an aggregate average Market Value during
the period of 20 consecutive Trading Days beginning on the sixteenth
Trading Day immediately succeeding the Disposition Date having a
Fair Value as of the Disposition Date of their Proportionate
Interest in the Net Proceeds of such Disposition ; or

(2) declare that each outstanding share of circle.com Stock shall be
converted as of the Conversion Date provided by paragraph (E) of
subsection 2.4.5 into a number of fully paid and nonassessable shares
of SNC Stock (or, if the SNC Stock is not Publicly Traded at such time
and shares of another class or series of common stock of the
Corporation (other than circle.com Stock) are then Publicly Traded, of
such other class or series of common stock as has the largest Market
Capitalization as of the close of business on the Trading Day
immediately preceding the date of the notice of such conversion
required by paragraph (E) of subsection 2.4.5) at a 10% premium (based
on the average Market Value of one share of circle.com Stock as
compared to the average Market Value of one share of SNC Stock during
the 20 consecutive Trading Day period beginning on the sixteenth
Trading Day following the Disposition Date).

Notwithstanding the foregoing provisions of this paragraph (A), the
Corporation shall redeem circle.com Stock as provided by subparagraph
(1)(b)(i) or (1)(b)(ii) of this paragraph (A) only if the amount to be paid in
redemption of such stock is less than or equal to the sum of (i) the Available
Dividend Amount for circle.com as of the Redemption Date and (ii) the amount
determined to be capital in respect of the shares to be redeemed in accordance
with applicable corporation law as of the Redemption Date.

(B) For purposes of this subsection 2.4.1:

(1) as of any date, "All or Substantially All of the Assets of
circle.com" shall mean a portion of such assets that represents at
least 80% of the Fair Value of the properties and assets attributable
to circle.com as of such date;

(2) in the case of a Disposition of the assets attributed to
circle.com in a series of related transactions, such Disposition shall
not be deemed to have been consummated until the consummation of the
last of such transactions; and

(3) the Board of Directors may pay any dividend or redemption price
referred to in paragraph (A) of this subsection 2.4.1 in cash,
securities (other than SNC Stock) or other property (or a combination
thereof), regardless of the form or nature of the proceeds of the
Disposition.

(C) At any time within one year after the payment date for the dividend
or the redemption price with respect to the circle.com Stock provided for
by subparagraph (1) of paragraph (A) of this subsection 2.4.1, the Board of
Directors may declare that each share of circle.com Stock remaining
outstanding shall be converted into a number of fully paid and
nonassessable shares of SNC Stock (or, if the SNC Stock is not Publicly
Traded at such time and shares of any other class or series of common stock
of the Corporation (other than circle.com Stock) are then Publicly Traded,
of such other class or series of common stock as has the largest Market
Capitalization as of the close of business on the Trading Day immediately
preceding the date of the notice of such conversion required by paragraph
(E) of subsection 2.4.5) at a 10% premium

A-5
<PAGE>

(based on the average Market Value of circle.com Stock during the 20
consecutive Trading Day period ending on the fifth Trading Day immediately
preceding the date on which the Corporation mails the notice of
conversion).

(D) At any time, the Board of Directors may declare that each outstanding
share of circle.com Stock shall be converted, as of the Conversion Date
provided by paragraph (E) of subsection 2.4.5, into the number of fully
paid and nonassessable shares of SNC Stock (or, if the SNC Stock is not
Publicly Traded at such time and shares of any other class or series of
common stock of the Corporation (other than circle.com Stock) are then
Publicly Traded, of such other class or series of common stock as has the
largest Market Capitalization as of the close of business on the Trading
Day immediately preceding the date of the notice of conversion required by
paragraph (E) of subsection 2.4.5) equal to the ratio of (i) the 20-day
average market price of a share of SNC Stock for the 20 Trading Days
immediately preceding the fifth day before the Board makes such election,
to (ii) the Premium multiplied by the 20-day average market price of the
circle.com Stock for the same period. The "Premium" shall initially be %
during the first calendar quarter in which the circle.com Stock is
initially issued and shall decrease by one percentage point for each
succeeding quarter, until the eleventh succeeding quarter, during and after
which it shall be fixed at %.

(E) Upon the occurrence of an Adverse Tax Event, the Board of Directors
may declare that each outstanding share of circle.com Stock shall be
converted, as of the Conversion Date provided by paragraph (E) of
subsection 2.4.5, into the number of fully paid and nonassessable shares of
SNC Stock (or, if the SNC Stock is not Publicly Traded at such time and
shares of any other class or series of common stock of the Corporation
(other than circle.com Stock) are then Publicly Traded, of such other class
or series of common stock as has the largest Market Capitalization as of
the close of business on the Trading Day immediately preceding the date of
the notice of conversion required by paragraph (E) of subsection 2.4.5)
equal to the ratio of (i) the 20-day average market price of a share of SNC
Stock for the 20 Trading Days immediately preceding the fifth day before
the Board makes such election, to (ii) the 20-day average market price of
the circle.com Stock for the same period. "Adverse Tax Event" shall mean
the receipt by the Corporation of an opinion of tax counsel experienced in
such matters, who shall not be an officer or employee of the Corporation or
any of its affiliates, to the effect that, as a result of any amendment to,
or change in the laws (or any regulations thereunder) of the United States
of any political subdivision or taxing authority thereof or therein
(including any announced proposed change by an administrative agency in
such regulations), or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such
laws or regulations, it is more likely than not that for United States
federal income tax purposes (1) the Corporation, its subsidiaries or
affiliates, or any of its successors or its stockholders is or, at any time
in the future, will be subject to tax upon the issuance of shares of either
SNC Stock or circle.com Stock or (2) either SNC Stock or circle.com Stock
is not or, at any time in the future, will not be treated solely as stock
of the Corporation. For purposes of rendering such tax opinion, tax counsel
shall assume that any administrative proposals will be adopted as proposed.
However, in the event a change in law is proposed, tax counsel shall render
an opinion only in the event of enactment.

2.4.2. Redemption or Conversion of SNC Stock.

(A) At any time, the Board of Directors of the Corporation may declare
that each outstanding share of SNC Stock shall be converted, as of the
Conversion Date provided by paragraph (E) of subsection 2.4.5, into the
number of fully paid and nonassessable shares of circle.com Stock (or, if
the circle.com Stock is not Publicly Traded at such time and shares of any
other class or series of common stock of the Corporation (other than SNC
Stock) are then Publicly Traded, of such other class or series of common
stock as has the largest Market Capitalization as of the close of business
on the Trading Day immediately preceding the date of the notice of
conversion required by paragraph (E) of subsection 2.4.5) equal to the
ratio of (i) the 20-day average market price of a share of circle.com Stock
for the 20 Trading Days immediately preceding the fifth day before the
Conversion Date to % of the 20-day average market price of the SNC Stock
over the same period.

A-6
<PAGE>

(B) Upon the occurrence of an Adverse Tax Event, the Board of Directors
may declare that each outstanding share of SNC Stock shall be converted, as
of the Conversion Date provided by paragraph (E) of subsection 2.4.5, into
the number of fully paid and nonassessable shares of circle.com Stock (or,
if the circle.com Stock is not Publicly Traded at such time and shares of
any other class or series of common stock of the Corporation (other than
SNC Stock) are then Publicly Traded, of such other class or series of
common stock as has the largest Market Capitalization as of the close of
business on the Trading Day immediately preceding the date of the notice of
conversion required by paragraph (E) of subsection 2.4.5) equal to the
ratio of (i) the 20-day average market price of a share of circle.com Stock
for the 20 Trading Days immediately preceding the fifth day before the
Board makes such election, to (ii) the 20-day average market price of the
SNC Stock for the same period.

2.4.3. Redemption of Common Stock for Subsidiary Stock.At any time at
which all of the assets attributable to circle.com (and no other assets of
the Corporation or any subsidiary thereof) are held directly or indirectly
by one or more other wholly-owned subsidiaries of the Corporation (each, a
"circle.com Holding Sub") and all of the liabilities attributed to
circle.com (and no other liabilities of the Corporation or any subsidiary
thereof) are directly or indirectly the primary responsibility of one or
more circle.com Holding Subs, the Board of Directors may, provided that
there are funds of the Corporation legally available therefor, redeem all
of the outstanding shares of circle.com Stock, on a Redemption Date of
which notice is delivered in accordance with paragraph (F) of subsection
2.4.5, in exchange for the number of shares of common stock of each
circle.com Holding Sub as equals each holder's Proportionate Interest in
such shares.

2.4.4. Treatment of Convertible Securities. Subject to the last sentence
of this subsection 2.4.4, after any Conversion Date or Redemption Date on
which all outstanding shares of any class of Common Stock were converted or
redeemed, any share of such class of Common Stock that is to be issued upon
the conversion, exchange or exercise of any Convertible Securities shall
not be issued and instead, immediately upon such conversion, exchange or
exercise and without any notice from or to, or any other action on the part
of, the Corporation or its Board of Directors or the holder of such
Convertible Security, there shall be delivered to or for the account of the
holder of such Convertible Security the following:

(A) in the event the shares of such class of Common Stock outstanding on
such Conversion Date were converted into shares of the other class of
Common Stock (or another class or series of common stock of the
Corporation) pursuant to subparagraph (A)(2) or paragraph (C) or (D) of
subsection 2.4.1 or paragraph (A) of subsection 2.4.2, there shall be
delivered the amount of cash and/or the number of shares of the kind of
capital stock and/or other securities or property of the Corporation that
the number of shares of such class of Common Stock that were to be issued
upon such conversion, exchange or exercise would have received had such
shares been outstanding on such Conversion Date; or

(B) in the event the shares of such class of Common Stock outstanding on
such Redemption Date were redeemed pursuant to subparagraph (A)(1)(b) of
subsection 2.4.1 or subsection 2.4.3, there shall be delivered, to the
extent of funds of the Corporation legally available therefor, the amount
in cash for each share of such class of Common Stock that otherwise would
be issued upon such conversion, exchange or exercise equal to the Fair
Value on the Redemption Date of the cash, securities and/or property paid
in consideration of such redemption.

The provisions of the immediately preceding sentence shall not apply to the
extent that other adjustments in respect of such conversion, exchange or
redemption of a class of Common Stock are to be made pursuant to the
provisions of such Convertible Securities.

2.4.5. Notice and Other Provisions.

(A) Not later than the tenth Trading Day following the consummation of a
Disposition referred to in paragraph (A) of subsection 2.4.1, the
Corporation shall announce publicly by press release (1) the amount of the
Net Proceeds of such Disposition, (2) the number of shares outstanding of
circle.com Stock subject

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to such Disposition, (3) the number of shares of circle.com Stock into or
for which Convertible Securities are then convertible, exchangeable or
exercisable and the conversion, exchange or exercise price thereof and (4)
the Number of Shares Issuable With Respect to SNC's Retained Interest in
circle.com. Not earlier than the 26th Trading Day and not later than the
30th Trading Day following the consummation of such Disposition, the
Corporation shall announce publicly by press release which of the actions
specified in paragraph (A) of subsection 2.4.1 it has irrevocably
determined to take in respect of such Disposition.

(B) If the Corporation determines to pay a dividend on shares of
circle.com Stock pursuant to subparagraph (A)(1)(a) of subsection 2.4.1,
the Corporation shall, not later than the 30th Trading Day following the
consummation of the Disposition referred to in such subparagraph, cause
notice to be given to each holder of shares of circle.com Stock and to each
holder of Convertible Securities that are convertible into or exchangeable
or exercisable for shares of circle.com Stock (unless alternate provision
for such notice to the holders of such Convertible Securities is made
pursuant to the terms of such Convertible Securities), setting forth (1)
the record date for determining holders entitled to receive such dividend,
which shall be not earlier than the 40th Trading Day and not later than the
50th Trading Day following the consummation of such Disposition, (2) the
anticipated payment date of such dividend (which shall not be more than 85
Trading Days following the consummation of such Disposition), (3) the
type(s) of property to be paid as such dividend in respect of the
outstanding shares of circle.com Stock and (4) in the case of notice to be
given to holders of Convertible Securities, a statement to the effect that
a holder of such Convertible Securities shall be entitled to receive such
dividend only if such holder properly converts, exchanges or exercises such
Convertible Securities on or prior to the record date referred to in clause
(1) of this sentence. Such notice shall be sent by first-class mail,
postage prepaid, to each such holder at such holder's address as the same
appears on the transfer books of the Corporation.

(C) If the Corporation determines to redeem circle.com Stock pursuant to
subparagraph (A)(1)(b)(i) of subsection 2.4.1, the Corporation shall, not
later than the 30th Trading Day following the consummation of the
Disposition referred to in such subparagraph, cause notice to be given to
each holder of shares of circle.com Stock, and to each holder of
Convertible Securities convertible into or exchangeable or exercisable for
shares of circle.com Stock (unless alternate provision for such notice to
the holders of such Convertible Securities is made pursuant to the terms of
such Convertible Securities), setting forth (1) a statement that all shares
of circle.com Stock outstanding on the Redemption Date shall be redeemed,
(2) the Redemption Date (which shall not be more than 85 Trading Days
following the consummation of such Disposition), (3) the type(s) of
property in which the redemption price for the shares to be redeemed is to
be paid, (4) the place or places where certificates for shares of
circle.com Stock, properly endorsed or assigned for transfer (unless the
Corporation waives such requirement), are to be surrendered for delivery of
cash and/or securities or other property, (5) in the case of notice to be
given to holders of Convertible Securities, a statement to the effect that
a holder of such Convertible Securities shall be entitled to participate in
such redemption only if such holder properly converts, exchanges or
exercises such Convertible Securities on or prior to the Redemption Date
referred to in clause (2) of this sentence and a statement as to what, if
anything, such holder will be entitled to receive pursuant to the terms of
such Convertible Securities or, if applicable, this Section 2.4 if such
holder thereafter converts, exchanges or exercises such Convertible
Securities and (6) a statement to the effect that, except as otherwise
provided by paragraph (H) of this subsection 2.4.5, dividends on such
shares of such Common Stock shall cease to be paid as of such Redemption
Date. Such notice shall be sent by first-class mail, postage prepaid, to
each such holder at such holder's address as the same appears on the
transfer books of the Corporation.

(D) If the Corporation determines to redeem circle.com Stock pursuant to
subparagraph (A)(1)(b)(ii) of subsection 2.4.1, the Corporation shall, not
later than the 30th Trading Day following the consummation of the
Disposition referred to in such subparagraph, cause notice to be given to
each holder of shares of such class of Common Stock and to each holder of
Convertible Securities that are convertible into or exchangeable or
exercisable for shares of circle.com Stock (unless alternate provision for
such notice to the holders of such Convertible Securities is made pursuant
to the terms of such Convertible Securities) setting forth (1) a date not
earlier than the 40th Trading Day and not later than the 50th Trading Day
following the

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consummation of the Disposition in respect of which such redemption is to
be made on which shares of circle.com Stock shall be selected for
redemption, (2) in the case of notice to be given to holders of Convertible
Securities, a statement to the effect that a holder of such Convertible
Securities shall be eligible to participate in such redemption only if such
holder properly converts, exchanges or exercises such Convertible
Securities on or prior to the record date referred to in clause (1) of this
sentence, and a statement as to what, if anything, such holder will be
entitled to receive pursuant to the terms of such Convertible Securities
or, if applicable, this subsection 2.4 if such holder thereafter converts,
exchanges or exercises such Convertible Securities and (3) a statement that
the Corporation will not be required to register a transfer of any shares
of such class of Common Stock for a period of 15 Trading Days next
preceding the date referred to in clause (1) of this sentence. Promptly
following the date referred to in clause (1) of the preceding sentence, but
not earlier than 40 Trading Days nor later than 50 Trading Days following
the consummation of such Disposition, the Corporation shall cause a notice
to be given to each holder of record of shares of circle.com Stock to be
redeemed setting forth (1) the number of shares of circle.com Stock held by
such holder to be redeemed, (2) a statement that such shares of circle.com
Stock shall be redeemed, (3) the Redemption Date, (4) the kind and per
share amount of cash and/or securities or other property to be received by
such holder with respect to each share of circle.com Stock to be redeemed,
including reasonable detail as to the calculation thereof, (5) the place or
places where certificates for shares of such class of Common Stock,
properly endorsed or assigned for transfer (unless the Corporation shall
waive such requirement), are to be surrendered for delivery of such cash
and/or securities or other property, (6) if applicable, a statement to the
effect that the shares being redeemed may no longer be transferred on the
transfer books of the Corporation after the Redemption Date and (7) a
statement to the effect that, subject to paragraph (I) of this subsection
2.4.5, dividends on such shares of such class of Common Stock shall cease
to be paid as of the Redemption Date. Such notices shall be sent by first-
class mail, postage prepaid, to each such holder at such holder's address
as the same appears on the transfer books of the Corporation.

(E) If the Corporation determines to convert the circle.com Stock into
SNC Stock (or another class or series of common stock of the Corporation)
pursuant to subparagraph (A)(2) or paragraph (C) or (D) of subsection
2.4.1, or if the Corporation determines to convert the SNC Stock into
circle.com Stock (or another class or series of common stock of the
Corporation) pursuant to subparagraph (A) of subsection 2.4.2, as the case
may be, the Corporation shall, not earlier than the 35th Trading Day and
not later than the 45th Trading Day prior to the Conversion Date, cause
notice to be given to each holder of shares of such class of Common Stock
and to each holder of Convertible Securities that are convertible into or
exchangeable or exercisable for shares of such class of Common Stock
(unless alternate provision for such notice to the holders of such
Convertible Securities is made pursuant to the terms of such Convertible
Securities) setting forth (1) a statement that all outstanding shares of
such class of Common Stock shall be converted, (2) the Conversion Date
(which, in the case of a conversion after a Disposition, shall not be more
than 85 Trading Days following the consummation of such Disposition), (3)
the per share number of shares of SNC Stock, circle.com Stock or another
class or series of common stock of the Corporation, as the case may be, to
be received with respect to each share of such class of Common Stock,
including details as to the calculation thereof, (4) the place or places
where certificates for shares of such class of Common Stock, properly
endorsed or assigned for transfer (unless the Corporation shall waive such
requirement), are to be surrendered for delivery of certificates for shares
of such Common Stock, (5) a statement to the effect that, subject to
paragraph (I) of this subsection 2.4.5, dividends on such shares of such
class of Common Stock shall cease to be paid as of such Conversion Date and
(6) in the case of notice to holders of such Convertible Securities, a
statement to the effect that a holder of such Convertible Securities shall
be entitled to receive shares of common stock upon such conversion only if
such holder converts, exchanges or exercises such Convertible Securities on
or prior to such Conversion Date and a statement as to what, if anything,
such holder will be entitled to receive pursuant to the terms of such
Convertible Securities or, if applicable, this subsection 2.4 if such
holder thereafter properly converts, exchanges or exercises such
Convertible Securities. Such notice shall be sent by first-class mail,
postage prepaid, to each such holder at such holder's address as the same
appears on the transfer books of the Corporation.

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(F) If the Corporation determines to redeem shares of circle.com Stock
pursuant to subsection 2.4.3, the Corporation shall cause notice to be
given to each holder of shares of circle.com Stock to be redeemed, and to
each holder of Convertible Securities that are convertible into or
exchangeable or exercisable for shares of circle.com Stock (unless
alternate provision for such notice to the holders of such Convertible
Securities is made pursuant to the terms of such Convertible Securities),
setting forth (1) a statement that all shares of circle.com Stock
outstanding on the Conversion Date shall be redeemed in exchange for shares
of common stock of the circle.com Holding Sub (2) the Redemption Date, (3)
the place or places where certificates for shares of circle.com Stock to be
redeemed, properly endorsed or assigned for transfer (unless the
Corporation shall waive such requirement), are to be surrendered for
delivery of certificates for shares of the circle.com Group Subsidiaries,
(4) a statement to the effect that, subject to paragraph (I) of this
subsection 2.4.5, dividends on such shares of circle.com Stock shall cease
to be paid as of such Redemption Date, (5) the number of shares of
circle.com Stock outstanding and the number of shares of circle.com Stock
into or for which outstanding Convertible Securities are then convertible,
exchangeable or exercisable and the conversion, exchange or exercise price
thereof and (6) in the case of notice to holders of Convertible Securities,
a statement to the effect that a holder of Convertible Securities shall be
entitled to receive shares of common stock of the circle.com Group
Subsidiaries upon redemption only if such holder converts, exchanges or
exercises such Convertible Securities on or prior to the Redemption Date
and a statement as to what, if anything, such holder will be entitled to
receive pursuant to the terms of such Convertible Securities or, if
applicable, this subsection 2.4 if such holder thereafter converts,
exchanges or exercises such Convertible Securities. Such notice shall be
sent by first-class mail, postage prepaid, not less than 10 Trading Days
nor more than 30 Trading Days prior to the Redemption Date to each such
holder at such holder's address as the same appears on the transfer books
of the Corporation.

(G) If less than all of the outstanding shares of a circle.com Stock are
to be redeemed pursuant to subparagraph (A)(1) of subsection 2.4.1, the
shares to be redeemed by the Corporation shall be selected from among the
holders of shares of circle.com Stock outstanding at the close of business
on the record date for such redemption on a pro rata basis among all such
holders or by lot or by such other method as may be determined by the Board
of Directors of the Corporation to be equitable.

(H) The Corporation shall not be required to issue or deliver fractional
shares of any capital stock or of any other securities to any holder of any
class of Common Stock upon any conversion, redemption, dividend or other
distribution pursuant to this subsection 2.4. If more than one share of any
class of Common Stock shall be held at the same time by the same holder,
the Corporation may aggregate the number of shares of any capital stock
that shall be issuable or any other securities or property that shall be
distributable to such holder upon any conversion, redemption, dividend or
other distribution (including any fractional shares). If there are
fractional shares of any capital stock or of any other securities remaining
to be issued or distributed to the holders of any class of Common Stock,
the Corporation shall, if such fractional shares are not issued or
distributed to the holder, pay cash in respect of such fractional shares in
an amount equal to the Fair Value thereof on the fifth Trading Day prior to
the date such payment is to be made (without interest).

(I) No adjustments in respect of dividends shall be made upon the
conversion or redemption of any shares of any class of Common Stock;
provided, however, that if the Conversion Date or Redemption Date, as the
case may be, with respect to any shares of any class of Common Stock shall
be subsequent to the record date for the payment of a dividend or other
distribution thereon or with respect thereto, the holders of such shares of
such class of Common Stock at the close of business on such record date
shall be entitled to receive the dividend or other distribution payable on
or with respect to such shares on the date set for payment of such dividend
or other distribution, in each case without interest, notwithstanding the
subsequent conversion or redemption of such shares.

(J) Before any holder of any class of Common Stock shall be entitled to
receive any cash payment and/or certificates or instruments representing
shares of any capital stock and/or other securities or property to be
distributed to such holder with respect to such shares of such class of
Common Stock pursuant to this

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subsection 2.4, such holder shall surrender at such place as the
Corporation shall specify certificates for such shares of such class of
Common Stock, properly endorsed or assigned for transfer (unless the
Corporation shall waive such requirement). The Corporation shall as soon as
practicable after receipt of certificates representing such shares of such
class of Common Stock deliver to the person for whose account such shares
of such class of Common Stock were so surrendered, or to such person's
nominee or nominees, the cash and/or the certificates or instruments
representing the number of whole shares of the kind of capital stock and/or
other securities or property to which such person shall be entitled as
aforesaid, together with any payment in respect of fractional shares
contemplated by paragraph (H) of this subsection 2.4.5, in each case
without interest. If less than all of the shares of any class of Common
Stock represented by any one certificate are to be redeemed, the
Corporation shall issue and deliver a new certificate for the shares of
such class of Common Stock not redeemed.

(K) From and after any applicable Conversion Date or Redemption Date, as
the case may be, all rights of a holder of shares of any class of Common
Stock that were converted or redeemed shall cease except for the right,
upon surrender of the certificates representing such shares of such class
of Common Stock as required by paragraph (J) of this subsection 2.4.5, to
receive the cash and/or the certificates or instruments representing shares
of the kind of capital stock and/or other securities or property for which
such shares were converted or redeemed, together with any payment in
respect of fractional shares contemplated by paragraph (H) of this
subsection 2.4.5 and rights to dividends as provided in paragraph (I) of
this subsection 2.4.5, in each case without interest. No holder of a
certificate that immediately prior to the applicable Conversion Date
represented shares of a class of Common Stock shall be entitled to receive
any dividend or other distribution or interest payment with respect to
shares of any kind of capital stock or other security or instrument for
which such class of Common Stock was converted until the surrender as
required by this subsection 2.4 of such certificate in exchange for a
certificate or certificates or instrument or instruments representing such
capital stock or other security. Upon such surrender, there shall be paid
to the holder the amount of any dividends or other distributions (without
interest) which theretofore became payable on any class of capital stock of
the Corporation as of a record date after the Conversion Date, but that
were not paid by reason of the foregoing, with respect to the number of
whole shares of the kind of capital stock represented by the certificate or
certificates issued upon such surrender. From and after a Conversion Date,
the Corporation shall, however, be entitled to treat the certificates for a
class of Common Stock that have not yet been surrendered for conversion as
evidencing the ownership of the number of whole shares of the kind or kinds
of capital stock of the Corporation for which the shares of such class of
Common Stock represented by such certificates shall have been converted,
notwithstanding the failure to surrender such certificates.

(L) The Corporation shall pay any and all documentary, stamp or similar
issue or transfer taxes that may be payable in respect of the issuance or
delivery of any shares of capital stock and/or other securities upon
conversion or redemption of shares of any class of Common Stock pursuant to
this subsection 2.4. The Corporation shall not, however, be required to pay
any tax that may be payable in respect of any transfer involved in the
issuance or delivery of any shares of capital stock and/or other securities
in a name other than that in which the shares of such class of Common Stock
so converted or redeemed were registered, and no such issuance or delivery
shall be made unless and until the person requesting such issuance or
delivery has paid to the Corporation the amount of any such tax or has
established to the satisfaction of the Corporation that such tax has been
paid.

(M) Neither the failure to mail any notice required by this subsection
2.4.5 to any particular holder of Common Stock or of Convertible Securities
nor any defect therein shall affect the sufficiency thereof with respect to
any other holder of outstanding shares of Common Stock or of Convertible
Securities or the validity of any such conversion or redemption.

(N) The Board of Directors may establish such rules and requirements to
facilitate the effectuation of the transactions contemplated by this
subsection 2.4 as the Board of Directors shall determine to be appropriate.

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2.5 Application of the Provisions of Article V.

2.5.1. Certain Determinations by the Board of Directors. The Board of
Directors shall make such determinations with respect to the assets and
liabilities attributable to the Groups, the application of the provisions
of this Section 2 to transactions to be engaged in by the Corporation and
the powers, preferences and relative, participating, optional and other
special rights of the holders of the classes of Common Stock, and the
qualifications and restrictions thereon, provided by this Restated
Certificate of Incorporation with respect to such transactions as may be or
become necessary or appropriate to the exercise of such powers, preferences
and relative, participating, optional and other special rights, including,
without limiting the foregoing, the determinations referred to in the
following paragraphs (A), (B), (C) and (D) of this subsection 2.5.1. A
record of any such determination shall be filed with the records of the
actions of the Board of Directors.

(A) Upon any acquisition by the Corporation or its subsidiaries of any
assets or business, or any assumption of liabilities, outside of the
ordinary course of business of SNC or circle.com, as the case may be, the
Board of Directors shall determine whether such assets, business and
liabilities (or an interest therein) shall be for the benefit of SNC or
circle.com or that an interest therein shall be partly for the benefit of
SNC and partly for the benefit of circle.com and, accordingly, shall be
attributable to SNC or circle.com, or partly to each, in accordance with
subsection 2.7.4 or 2.7.20, as the case may be.

(B) Upon any issuance of any shares of circle.com Stock at a time when
the Retained Interest Percentage is more than zero, the Board of Directors
shall determine, based on the use of the proceeds of such issuance and any
other relevant factors, whether all or any part of the shares of circle.com
Stock so issued should reduce the Retained Interest Percentage and the
Retained Interest Percentage shall be adjusted accordingly.

(C) Upon any issuance by the Corporation or any subsidiary thereof of any
Convertible Securities that are convertible into or exchangeable or
exercisable for shares of circle.com Stock, if at the time such Convertible
Securities are issued the Retained Interest Percentage is greater than
zero, the Board of Directors shall determine whether, upon conversion,
exchange or exercise thereof, the issuance of shares of circle.com Stock
pursuant thereto shall, in whole or in part, reduce the Retained Interest
Percentage, taking into consideration the use of the proceeds of such
issuance of Convertible Securities in the business of SNC or circle.com and
any other relevant factors.

(D) Upon any redemption or repurchase by the Corporation or any
subsidiary thereof of shares of any Preferred Stock of any class or series
or of other securities or debt obligations of the Corporation, if some of
such shares, other securities or debt obligations were attributed to SNC
and some of such shares, other securities or debt obligations were
attributed to circle.com, the Board of Directors shall determine which, if
any, of such shares, other securities or debt obligations redeemed or
repurchased shall be attributable to SNC and which, if any, of such shares,
other securities or debt obligations shall be attributable to circle.com
and, accordingly, how many of the shares of such series of Preferred Stock
or of such other securities, or how much of such debt obligations, that
remain outstanding, if any, continue to be attributable to SNC or to
circle.com.

2.5.2. Sources of Dividends and Distributions; Uses of Proceeds of Share
Issuances. Notwithstanding the attribution of properties or assets of the
Corporation to SNC or circle.com as provided by subsection 2.7.4 or 2.7.20,
but subject to the limitations of subsections 2.1.1, 2.1.2 and 2.1.4, the
Board of Directors (i) may cause dividends or distributions or other
payments to the holders of any class of Common Stock or any class or series
of Preferred Stock to be made out of the properties or assets attributed to
any Group, subject, however, to any contrary term of any series of
Preferred Stock fixed in accordance with Section 3 of this Article V, and
(ii) may cause the proceeds of issuance of any shares of SNC Stock or
circle.com Stock or any class or series of Preferred Stock, to whichever
Group attributable in accordance with subsection 3.4, to be used in the
business of, and to be attributed either to SNC in accordance with
subsection 2.7.20 or to circle.com in accordance with subsection 2.7.4.

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2.5.3. Certain Determinations Not Required. Notwithstanding the foregoing
provisions of this subsection 2.5, the provisions of subsection 2.7.4 or
2.7.20 or any other provision of this Article V, at any time when there are
not outstanding both (i) one or more shares of SNC Stock or Convertible
Securities convertible into or exchangeable or exercisable for SNC Stock
and (ii) one or more shares of circle.com Stock or Convertible Securities
convertible into or exchangeable or exercisable for circle.com Stock, the
Corporation (A) need not attribute any of the assets or liabilities of the
Corporation or any of its subsidiaries to SNC or circle.com or (B) make any
determination required in connection therewith, nor shall the Board of
Directors be required to make any of the determinations otherwise required
by this Article V, and in such circumstances the holders of the shares of
SNC Stock or circle.com Stock outstanding, as the case may be, shall
(unless otherwise specifically provided by this Restated Certificate of
Incorporation) be entitled to all the voting powers, preferences, optional
or other special rights of both classes of the Common Stock without
differentiation between the SNC Stock and the circle.com Stock and any
provision of this Article V to the contrary shall no longer be in effect or
operative and the Board of Directors may cause the Corporation's
certificate of incorporation to be amended as permitted by law to delete
such provisions as are no longer operative or of further effect.

2.5.4. Board Determinations Binding. Subject to applicable law, any
determinations made in good faith by the Board of Directors of the
Corporation under any provision of this subsection 2.5 or otherwise in
furtherance of the application of this Section 2 shall be final and binding
on all shareholders.

2.6 Adjustments to Number of Shares Issuable with Respect to SNC's Retained
Interest in circle.com

The Number of Shares Issuable with Respect to SNC's Retained Interest in
circle.com, as in effect from time to time, shall, automatically without
action by the Board, be:

2.6.1. adjusted in proportion to any changes in the number of outstanding
shares of circle.com Stock caused by subdivisions (by stock split,
reclassification or otherwise) or combinations (by reverse stock split,
reclassification or otherwise) of shares of circle.com Stock or by
dividends or other distributions of shares of circle.com Stock on shares of
circle.com Stock (and, in each such case, rounded, if necessary to the
nearest whole number);

2.6.2. decreased by (i) if the Corporation issues any shares of
circle.com Stock and the Board attributes that issuance (and the proceeds
thereof) to SNC, the number of shares of circle.com Stock so issued, and
(ii) if the Board re-allocates to SNC any cash or other assets theretofore
allocated to circle.com in connection with a redemption of shares of
circle.com Stock (as required pursuant to clause (ii) of the proviso to the
definition of SNC below) or in return for a decrease in the Number of
Shares Issuable with Respect to SNC's Retained Interest in circle.com, the
number (rounded, if necessary, to the nearest whole number) equal to (x)
the aggregate Fair Value of such cash or other assets divided by (y) the
Market Value of one share of circle.com Stock as of the date of such re-
allocation; and

2.6.3. increased by (i) if the Corporation repurchases any shares of
circle.com Stock and the Board attributes that repurchase (and the
consideration therefor) to SNC, the number of shares of circle.com Stock so
repurchased and (ii) if the Board re-allocates to circle.com any cash or
other assets theretofore allocated to SNC in return for an increase in the
Number of Shares Issuable with Respect to SNC's Retained Interest in
circle.com, the number (rounded, if necessary, to the nearest whole number)
equal to (x) the Fair Value of such cash or other assets divided by (y) the
Market Value of one share of circle.com Stock as of the date of such re-
allocation.

Neither the Corporation nor the Board shall take any action that would, as a
result of the foregoing adjustments, reduce the Number of Shares Issuable with
Respect to SNC's Retained Interest in circle.com to below zero. Subject to the
preceding sentence, the Board may attribute the issuance of any shares of
circle.com Stock (and the consideration therefor) to SNC or to circle.com, as
the Board determines in its sole discretion; provided, however, that the Board
must attribute to SNC the issuance of any shares of circle.com Stock that are
issued (1) as a dividend or other distribution on, or as consideration for the
repurchase of, shares of SNC Stock or (2) as consideration to acquire any
assets or satisfy any liabilities attributed to SNC.

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2.7 Certain Definitions. As used in this Section 2 of this Article V, the
following terms shall have the following meanings (with terms defined in the
singular having comparable meaning when used in the plural and vice versa),
unless the context otherwise requires. As used in this subsection 2.7, a
"contribution" or "transfer" of assets or properties from one Group to another
shall refer to the reattribution of such assets or properties from the
contributing or transferring Group to the other Group and correlative phrases
shall have correlative meanings.

2.7.1. All or Substantially All of the Assets of circle.com means a
portion of such assets that represent at least 80% of the then-current Fair
Value of the assets of circle.com.

2.7.2. Available Dividend Amount of circle.com, on any date, shall mean
the amount that would then be legally available for the payment of
dividends on circle.com Stock under Delaware law if the circle.com group
were a separate Delaware corporation having outstanding a number of shares
of common stock, par value $0.001 per share, equal to the number of shares
of circle.com Stock that are then outstanding plus the Number of Shares
Issuable With Respect to SNC's Retained Interest in circle.com.

2.7.3. Available Dividend Amount for SNC, on any date, shall mean the
amount that would then be legally available for the payment of dividends on
SNC's common stock under Delaware law if (1) SNC and circle.com were each a
separate Delaware corporation; (2) SNC had outstanding a number of shares
of common stock, par value $0.001 per share, equal to the number of shares
of SNC stock that are then outstanding; (3) the assumptions about
circle.com set forth in the definition of "circle.com" in subsection ;
and (4) SNC owned a number of shares of circle.com Stock equal to the
Number of Shares Issuable with Respect to SNC's Retained Interest in
circle.com.

2.7.4. circle.com shall mean, as of any date from and after the Effective
Date:

(A) the Internet professional services business of the Corporation,
including all of the businesses, assets and liabilities of the Corporation
and its subsidiaries that the Board of Directors has, as of the Effective
Date, allocated to the circle.com group;

(B) any assets or liabilities acquired or incurred by the Corporation or
any of its subsidiaries after the Effective Date in the ordinary course of
business and attributable to the circle.com group, as determined by the
Board of Directors as contemplated by paragraph (A) of subsection 2.5.1;

(C) any business, assets or liabilities acquired or incurred by the
Corporation or any of its subsidiaries after the Effective Date that the
Board of Directors has specifically allocated to the circle.com group or
that the Corporation otherwise allocates to the circle.com group in
accordance with policies established from time to time by the Board of
Directors;

(D) the rights and obligations of the circle.com group under any inter-
group debt deemed to be owned to or by the circle.com group (as those
rights and obligations are defined in accordance with policies established
from time to time by the Board of Directors); provided that:

(1) the Corporation may re-allocate assets from one group to the
other group in return for other assets or services rendered by that
other group in the ordinary course of business or in accordance with
policies established by the Board of Directors from time to time; or

(2) if the Corporation transfers cash, other assets or securities to
holders of circle.com Stock as a dividend or other distribution on
circle.com Stock (other than a dividend or distribution payable in
circle.com Stock), or as payment in a redemption of circle.com Stock
effected as a result of a Disposition referred to in paragraph (A) of
subsection 2.4.1, then the Board of Directors shall re-allocate from
the circle.com group to the SNC group cash, other assets having a Fair
Value equal to the aggregate Fair Value of the cash, assets or other
securities so transferred times a fraction, the numerator of which
shall equal the Number of Shares Issuable With Respect to SNC's
Retained

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Interest in circle.com on the record date for the dividend or
distribution, or on the date of redemption, and the denominator of
which shall equal the number of shares of circle.com Stock outstanding
on that date.

2.7.5. Conversion Date shall mean the date fixed by the Board of
Directors as the effective date for the conversion of shares of circle.com
Stock into shares of SNC Stock (or another class or series of common stock
of the Corporation) or of shares of SNC Stock into shares of circle.com
Stock (or another class or series of common stock of the Corporation), as
the case may be, as shall be set forth in the notice to holders of shares
of such class of Common Stock and to holders of any Convertible Securities
that are convertible into or exchangeable or exercisable for shares of such
class of Common Stock required pursuant to paragraph (E) of subsection
2.4.5.

2.7.6. Convertible Securities at any time shall mean any securities of
the Corporation or of any subsidiary thereof (other than shares of Common
Stock), including warrants and options, outstanding at such time that by
their terms are convertible into or exchangeable or exercisable for or
evidence the right to acquire any shares of any class of Common Stock,
whether convertible, exchangeable or exercisable at such time or a later
time or only upon the occurrence of certain events, but in respect of
antidilution provisions of such securities only upon the effectiveness
thereof.

2.7.7. Disposition shall mean a sale, transfer, assignment or other
disposition (whether by merger, consolidation, sale or contribution of
assets or stock or otherwise) of properties or assets (including stock,
other securities and goodwill).

2.7.8. Effective Date shall mean the date on which this Restated
Certificate of Incorporation shall have been filed with the Secretary of
State of the State of Delaware and become effective.

2.7.9. Fair Value shall mean, in the case of equity securities of a class
that has previously been Publicly Traded for a period of at least 15 months
or in the case of debt securities that are Publicly Traded, the Market
Value thereof (if such value, as so defined, can be determined) or, in the
case of an equity security that has not been Publicly Traded for at least
such period or a debt security that is not Publicly Traded, shall mean the
fair value per share of stock or per other unit of such other security, on
a fully distributed basis, as determined by an independent investment
banking firm experienced in the valuation of securities selected in good
faith by the Board of Directors, or, if no such investment banking firm is,
as determined in the good faith judgment of the Board of Directors,
available to make such determination, in good faith by the Board of
Directors; provided, however, that in the case of property other than
securities the "Fair Value" thereof shall be determined in good faith by
the Board of Directors based upon such appraisals or valuation reports of
such independent experts as the Board of Directors shall in good faith
determine to be appropriate in accordance with good business practice. Any
such determination of Fair Value shall be described in a statement filed
with the records of the actions of the Board of Directors.

2.7.10. Group shall mean, as of any date, SNC or circle.com, as the case
may be.

2.7.11. Market Capitalization of any class or series of common stock on
any date shall mean the product of (i) the Market Value of one share of
such class of common stock on such date and (ii) the number of shares of
such class of common stock outstanding on such date. Shares issuable with
respect to SNC's retained interest in circle.com are not considered to be
outstanding until they are in fact issued to third parties.

2.7.12. Market Value of a share of any class or series of capital stock
of the Corporation on any Trading Day shall mean the average of the high
and low reported sales prices of a share of such class or series on such
Trading Day or, in case no such reported sale takes place on such Trading
Day, the average of the closing price of a share of such class or series on
such Trading Day, in either case on the New York Stock Exchange or, if the
shares of such class or series are not listed or admitted to trading on
such exchange on such Trading Day, on the National Association of
Securities Dealers Automated Quotations System if

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quoted thereon, or if not, on the principal national securities exchange in
the United States or outside of the United States if such exchange is
approved by the Board of Directors, on which the shares of such class or
series are listed or admitted to trading or, if the shares of such class or
series are not listed or admitted to trading on any such national
securities exchange or quoted on such Automated Quotations System on such
Trading Day, the average of the closing bid and asked prices of a share of
such class or series in the over-the-counter market on such Trading Day as
furnished by any New York Stock Exchange member firm selected from time to
time by the Corporation or, if such closing bid and asked prices are not
made available by any such New York Stock Exchange member firm on such
Trading Day, the Fair Value of a share of such class or series; provided
that, for purposes of determining the market value of a share of any class
or series of capital stock of the Corporation for any period, (i) the
"Market Value" of a share of capital stock on any day prior to any "ex-
dividend" date or any similar date occurring during such period for any
dividend or distribution (other than any dividend or distribution
contemplated by clause (ii)(B) of this sentence) paid or to be paid with
respect to such capital stock shall be reduced by the Fair Value of the per
share amount of such dividend or distribution and (ii) the "Market Value"
of any share of such capital stock on any day prior to (A) the effective
date of any subdivision (by stock split or otherwise) or combination (by
reverse stock split or otherwise) of outstanding shares of such class of
capital stock occurring during such period or (B) any "ex-dividend" date or
any similar date occurring during such period for any dividend or
distribution with respect to such capital stock to be made in shares of
such class or series of capital stock or Convertible Securities that are
convertible, exchangeable or exercisable for such class or series of
capital stock shall be appropriately adjusted, as determined by the Board
of Directors, to reflect such subdivision, combination, dividend or
distribution; and provided further, that, if (a) the Corporation
repurchases outstanding shares of circle.com Stock and the Board of
Directors attributes that repurchase (and the consideration therefor) to
the circle.com group and (b) the Board of Directors determines to re-
allocate to SNC cash or other assets theretofore allocated to the
circle.com group in order to avoid a change in the Retained Interest
Percentage, the "Market Value" of a share of circle.com Stock used to
compute the corresponding reduction in the Number of Shares Issuable With
Respect to SNC's Retained Interest in circle.com will equal the Fair Value
of the consideration paid per share of circle.com Stock so repurchased; and
provided further, that, if the Corporation redeems a portion of the
outstanding shares of circle.com Stock (and the Board of Directors re-
allocates to SNC cash or other assets theretofore allocated to circle.com),
the "Market Value" of a share of circle.com Stock used to compute the
corresponding reduction in the Number of Shares Issuable With Respect to
SNC's Retained Interest in circle.com will equal the Fair Value of the
consideration paid per share of circle.com Stock so redeemed.

2.7.13. Net Proceeds of the sale of All or Substantially All of the
Assets of circle.com means an amount, if any, equal to what remains of the
gross proceeds of such Disposition after payment of, or reasonable
provision is made as determined by the Board of Directors for, (A) any
taxes payable by the Corporation (or which would have been payable but for
the utilization of tax benefits attributable to the other Group) in respect
of such Disposition or in respect of any resulting dividend or redemption
pursuant to subparagraph (A)(1)(a) or (b) of subsection 2.4.1, (B) any
transaction costs, including, without limitation, any legal, investment
banking and accounting fees and expenses and (C) any liabilities
(contingent or otherwise) of or attributable to the circle.com Group if
properties or assets attributable to the circle.com Group were disposed of
or attributable to the SNC Group if properties or assets attributable to
the SNC Group were disposed of, including, without limitation, any
liabilities for deferred taxes or any indemnity or guarantee obligations of
the Corporation incurred in connection with the Disposition or otherwise,
and any liabilities for future purchase price adjustments and any
preferential amounts plus any accumulated and unpaid dividends in respect
of Preferred Stock attributable to such Group. For purposes of this
definition, any properties and assets attributable to such Group remaining
after such Disposition shall constitute "reasonable provision" for such
amount of taxes, costs and liabilities (contingent or otherwise) as the
Board of Directors determines can be expected to be supported by such
properties and assets.

2.7.14. Number of Shares Issuable with Respect to SNC's Retained Interest
in circle.com shall initially be a number the Board of Directors designates
prior to the time the Corporation first issues shares of

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circle.com Stock as the number of shares of circle.com Stock that could be
issued by the Corporation for the account of SNC in respect of its retained
interest in circle.com; provided, however, that such number as in effect
from time to time shall automatically be adjusted as required by subsection
2.6 of this Article V.

2.7.15. Proportionate Interest of holders of circle.com Stock in the Net
Proceeds of a Disposition of All or Substantially All of the Assets of
circle.com (or in the outstanding shares of common stock of any
subsidiaries holding circle.com's assets and liabilities) means the amount
of such Net Proceeds (or the number of such shares) times the number of
shares of circle.com Stock outstanding divided by the Total Number of
Notional circle.com Shares Deemed Outstanding.

2.7.16. Publicly Traded with respect to any security shall mean (i)
registered under Section 12 of the Securities Exchange Act of 1934, as
amended (or any successor provision of law), and (ii) listed for trading on
the New York Stock Exchange or the American Stock Exchange (or any national
securities exchange registered under Section 7 of the Securities Exchange
Act of 1934, as amended (or any successor provision of law), that is the
successor to either such exchange) or quoted in the National Association of
Securities Dealers Automation Quotation System (or any successor system)
listed or admitted to trading on any national securities exchange of any
nation other than the U.S.A. which has been approved by the Board of
Directors.

2.7.17. Redemption Date shall mean the date fixed by the Board of
Directors as the effective date for a redemption of shares of any class of
Common Stock, as set forth in a notice to holders thereof required pursuant
to paragraph (C), (D) or (F) of subsection 2.4.5.

2.7.18. Related Business Transaction means any Disposition of all or
substantially all the properties and assets attributed to a Group in a
transaction or series of related transactions that result in the
Corporation receiving in consideration of such properties and assets
primarily equity securities (including, without limitation, capital stock,
debt securities convertible into or exchangeable for equity securities or
interests in a general or limited partnership or limited liability company,
without regard to the voting power or other management or governance rights
associated therewith) of (1) any entity which (i) acquires such properties
or assets or succeeds (by merger, formation of a joint venture or
otherwise) to the business conducted with such properties or assets or
controls such acquiror or successor and (ii) is primarily engaged or
proposes to engage primarily in one or more businesses similar or
complementary to the businesses conducted by such Group prior to such
Disposition, as determined by the Board of Directors.

(A) Retained Interest Percentage means the Number of Shares Issuable with
Respect to SNC's Retained Interest in circle.com divided by the Total
Number of Notional circle.com Shares Deemed Outstanding.

2.7.19. Total Number of Notional circle.com Shares Deemed Outstanding
means the number of shares of circle.com Stock outstanding plus the Number
of Shares Issuable with Respect to SNC's Retained Interest in circle.com.

2.7.20. SNC shall mean, as of any date from and as of the Effective Date:

(A) all of the businesses, assets and liabilities of Snyder
Communications and its subsidiaries, other than the businesses, assets and
liabilities that are part of circle.com;

(B) the rights and obligations of SNC under any inter-group debt deemed
to be owned to or by SNC (as such rights and obligations are defined in
accordance with policies established from time to time by the Board);

(C) a proportionate interest in circle.com (after giving effect to any
options, preferred stock, other securities or debt issued or incurred by
Snyder Communications and attributed to circle.com) equal to the Retained
Interest Percentage as of such date; provided that:

(1)the Corporation may re-allocate assets from one group to another
in return for other assets or services rendered by that other group in
the ordinary course of business or in accordance with policies
established by the Board from time to time, and

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(2) if the Corporation transfers cash, other assets or securities to
holders of circle.com Stock as a dividend or other distribution on
shares of circle.com Stock (other than a dividend or distribution
payable in shares of circle.com Stock), or as payment in a redemption
of circle.com Stock effected as a result of a sale of All or
Substantially All of the Assets of circle.com, then the Board shall re-
allocate from circle.com to SNC cash or other assets having a Fair
Value equal to the aggregate Fair Value of the cash, other assets or
securities so transferred times a fraction, the numerator of which
shall equal the Number of Shares Issuable with Respect to SNC's
Retained Interest in circle.com on the record date for such dividend or
distribution, or on the date of such redemption, and the denominator of
which shall equal the number of shares of circle.com Stock outstanding
on such date.

2.7.21. Trading Day shall mean each weekday other than any day on which
the relevant class of common stock of the Corporation is not traded on any
national securities exchange or quoted in the National Association of
Securities Dealers Automated Quotations System or in the over-the-counter
market.

Section 3. Preferred Stock.

3.1 General. The Corporation is authorized to issue shares of Preferred
Stock from time to time in one or more series as may from time to time be
determined by the Board of Directors, each of such series to be distinctly
designated. The voting powers, preferences and relative, participating,
optional and other special rights, and the qualifications, limitations or
restrictions thereon, if any, of each such series may differ from those of any
and all other series of Preferred Stock at any time outstanding, and the Board
is hereby expressly granted authority to fix, by resolution or resolutions,
the designation, number, voting powers, preferences and relative,
participating, optional and other special rights, and the qualifications,
limitations and restrictions thereon, of each such series, including, but
without limiting the generality of the foregoing, the following:

3.1.1. The distinctive designation of, and the number of shares of
Preferred Stock that shall constitute, such series, which number (except
where otherwise provided by the Board in the resolution establishing such
series) may be increased (but not above the total number of shares of
Preferred Stock) or decreased (but not below the number of shares of such
series then outstanding) from time to time by like action of the Board.

3.1.2. The rights in respect of dividends, if any, of such series of
Preferred Stock, the extent of the preference or relations, if any, of such
dividends to the dividends payable on any other class or classes or any
other series of the same or other class of classes of capital stock of the
Corporation, and whether such dividends shall be cumulative or
noncumulative.

3.1.3. The right, if any, of the holders of such series of Preferred
Stock to convert the same into, or exchange the same for, shares of any
other class or classes or of any other series of the same or any other
class or classes of capital stock of the Corporation, and the terms and
conditions of such conversion or exchange.

3.1.4. Whether or not shares of such series of Preferred Stock shall be
subject to redemption, and the redemption price of prices and the times at
which, and the terms and conditions on which, shares of such series of
Preferred Stock may be redeemed.

3.1.5. The rights, if any, of the holders of such series of Preferred
Stock upon the voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation or in the event of any merger or
consolidation of or sale of assets by the Corporation.

3.1.6. The terms of any sinking fund or redemption or purchase account,
if any, to be provided for shares of such series of the Preferred Stock.

3.1.7. The voting powers, if any, of the holders of any series of
Preferred Stock generally or with respect to any particular matter, which
may be less than, equal to or greater than one vote per share, and

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which may, without limiting the generality of the foregoing, include the
right to vote on a matter as a separate class or, voting as a series by
itself or together with the holders of any other series of Preferred Stock
or all series of Preferred Stock as a class, to elect one or more directors
of the Corporation generally or under such specific circumstances and on
such conditions as shall be provided in the resolution or resolutions of
the Board adopted pursuant hereto, including, without limitation, in the
event there shall have been a default in the payment of dividends on or
redemption of any one or more series of Preferred Stock.

3.2 Rights of Preferred Stock.

3.2.1. After adequate provision shall have been made with respect to
preferential dividends on any series of Preferred Stock (fixed in
accordance with the provisions of subsection 3.1), if any, shall have been
satisfied and after the Corporation shall have complied with all the
requirements, if any, with respect to redemption of, or the setting aside
of sums as sinking funds or redemption or purchase accounts with respect
to, any series of Preferred Stock (as fixed in accordance with the
provisions of subsection 3.1), and subject further to any other conditions
that may be fixed in accordance with the provisions of subsection 3.1, then
and not otherwise the holders of Common Stock shall be entitled to receive
such dividends as may be declared from time to time by the Board.

3.2.2. In the event of the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, after distribution in full of
the preferential amounts, if any (fixed in accordance with the provisions
of subsection 3.1), to be distributed to the holders of Preferred Stock by
reason thereof, the holders of Common Stock shall, subject to the
additional rights, if any (as fixed in accordance with the provisions of
subsection 3.1), of the holders of any outstanding shares of Preferred
Stock, be entitled to receive all of the remaining assets of the
Corporation, tangible or intangible, of whatever kind available for
distribution to stockholders as provided in subsection 2.3.

3.3 Attribution of Preferred Stock to Groups. Upon any issuance of any
shares of Preferred Stock of any series after the Effective Date, the Board
of Directors shall attribute for purposes of this Article V the shares so
issued entirely to SNC or entirely to circle.com or partly to SNC and
partly to circle.com in such proportion as the Board of Directors shall
determine. Upon any redemption or repurchase of shares of Preferred Stock,
the Board of Directors shall determine the proper attribution thereof in
accordance with paragraph (D) of subsection 2.5.1. A record of any such
determination shall be filed with the records of the actions of the Board
of Directors. Notwithstanding any such attribution of shares of Preferred
Stock to SNC or circle.com, any dividends or distributions or other
payments which may be made by the Corporation on such shares of Preferred
Stock may be made, and as required by the preferences and relative,
participating, optional or other special rights thereof shall be made, out
of any of the properties or assets of the Corporation, regardless of the
Group to which such properties or assets are attributed in accordance with
subsections 2.7.4 or 2.7.20, except as otherwise provided by the resolution
of the Board of Directors fixing in accordance with subsection 3.1 the
preferences and relative, participating, optional or other special rights
of a series of Preferred Stock.

ARTICLE VI

Board of Directors

Section 1. Powers of the Board of Directors. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors selected as provided by law and this Restated Certificate of
Incorporation and the By-laws of the Corporation. The Board of Directors shall
have the power, unless and to the extent that the Board may from time to time
by resolution relinquish or modify the power, without the assent or vote of
the stockholders, to make, alter, amend, change, add to, or repeal the By-laws
of the Corporation.

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Section 2. Vacancies. Except as otherwise provided for or fixed pursuant to
the provision of Article V, Section III hereof relating to the rights of the
holders of any series of Preferred Stock to elect additional directors, newly
created directorships resulting from any increase in the authorized number of
directors and any vacancies on the Board resulting from death, resignation,
disqualification, removal or other cause shall be filled as set forth in the
By-laws of the Corporation.

Section 3. Number of Directors Constituting the Board. The number of
directors that shall constitute the full Board, other than any directors
elected by the holders of any series of Preferred Stock as provided for or
fixed pursuant to the provisions of Article V, Section III hereof, shall be
fixed by the Bylaws of the Corporation.

Section 4. Election of Directors. The directors of the Corporation shall not
be required to be elected by written ballots unless the Bylaws of the
Corporation so provide.

ARTICLE VII

Duration of Corporate Existence

The Corporation is to have perpetual existence.

ARTICLE VIII

Director Liability

No director of the Corporation shall be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
provided that this Article VIII shall not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the
Corporation of its stockholders; (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under section 174 of Title 8 of the Corporation Law; or (iv) for any
transaction from which the director derived an improper personal benefit. In
the event that the Corporation Law or any successor thereto is amended with
respect to the permissible limits of directors' liability, this Article VIII
shall be deemed to provide the fullest limitation on liability permitted under
such amended statute. Any repeal or modification of this Article VIII by the
stockholders of the Corporation only shall be applied prospectively, to the
extent that such repeal or modification would, if applied retrospectively,
adversely affect any limitation on the personal liability of a director of the
Corporation existing immediately prior to such repeal or modification.

ARTICLE IX

Amendment of Certificate of Incorporation

The Corporation hereby reserves the right from time to time to amend, alter,
change or repeal any provision contained in this Restated Certificate of
Incorporation in any manner permitted by the Corporation Law and all rights and
powers conferred upon stockholders, directors and officers herein are granted
subject to this reservation.

IN WITNESS WHEREOF, this Restated Certificate of Incorporation which
restates, integrates and amends the provisions of the certificate of
incorporation of the Corporation, and which has been duly adopted by written
consent of the [stockholders] of the Corporation in accordance with the
provisions of Sections 228, 242 and 245 of the Delaware General Corporation
Law, has been executed by , its , this day of June
1999.

SNYDER COMMUNICATIONS, INC.

By:
-------------------------------

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ANNEX B

SNYDER COMMUNICATIONS, INC.

SECOND AMENDED AND RESTATED
1996 STOCK INCENTIVE PLAN
(Effective , 1999)

1. Purposes.

The purposes of the Snyder Communications, Inc. 1996 Stock Incentive Plan are
to promote the long-term growth of Snyder Communications, Inc. and its
subsidiaries by rewarding key management employees, consultants and directors
of Snyder Communications, Inc. and its subsidiaries with a proprietary interest
in Snyder Communications, Inc. for outstanding long-term performance and to
attract, motivate and retain highly qualified and capable employees,
consultants and directors.

2. Definitions.

Unless the context clearly indicates otherwise, the following terms shall
have the following meanings:

2.1 "Award" means an award granted to a Participant under the Plan in the
form of an Option, Restricted Stock, a Stock Appreciation Right, or any
combination of the foregoing.

2.2 "Board" means the Board of Directors of the Corporation.

2.3 "circle.com Stock" means shares of circle.com stock, par value $0.001 per
share, of the Corporation.

2.4 "Code" means the Internal Revenue Code of 1986, as amended, or any
successor law.

2.5 "Commission" means the Securities and Exchange Commission or any
successor agency.

2.6 "Committee" means the committee administering the Plan with respect to an
eligible group of persons as set forth in Section 3, or, if such a committee
has not been appointed, the Board.

2.7 "Compensation Committee" shall mean the Compensation Committee of the
Board, which Committee shall consist of at least two (2) members of the Board,
each of whom qualifies as both an "outside director" (within the meaning of
Section 162(m)(4) of the Code) and a "non-employee director" (within the
meaning of Rule 16b-3(b)(3) issued under the Securities Exchange Act of 1934).

2.8 "Consultant" means any person performing consulting or advisory services
for the Corporation or any Subsidiary, with or without compensation, including
a person or entity providing services pursuant to a management services
agreement with the Corporation, to whom the Corporation chooses to grant a Non-
Qualified Stock Option, Restricted Stock or Stock Appreciation Right in
accordance with the Plan, provided that bona fide services must be rendered by
such person and such services are not rendered in connection with the sale of
securities in a capital raising transaction.

2.9 "Director" means for purposes of the grant of Awards under the Plan, a
member of the Board of Directors of the Corporation or a Subsidiary.

2.10 "Corporation" means Snyder Communications, Inc., a Delaware corporation,
or any successor thereto.

2.11 "Disability" means total disability as defined in Section 22(e)(3) of
the Code.

2.12 "Exchange Act" means the Securities Exchange Act of 1934, as amended.

B-1
<PAGE>

2.13 "Fair Market Value" means, on any given date, the current fair market
value of shares as determined below:

(a) If the Shares are listed upon an established stock exchange or
exchanges, "Fair Market Value" means the closing price of such Shares on
the New York Stock Exchange, or if the Shares are not traded on the New
York Stock Exchange, the exchange that trades the largest volume of Shares
on the date of the Award.

(b) If the Shares are traded on the Nasdaq National Market, "Fair Market
Value" means the closing price of such Shares reported on the Nasdaq
National Market on the date of the Award, provided that if there should be
no sales of such Shares reported on such date, the Fair Market Value of
such Share on such date shall be deemed equal to the closing price as
reported by the Nasdaq National Market for the last preceding date on which
sales of such Shares were reported.

(c) In all other cases, "Fair Market Value" shall be determined by the
Committee using any reasonable method in good faith, provided that, with
respect to the initial public offering of Shares by the Corporation, "Fair
Market Value" means the initial offering price to the public of such
Shares.

2.14 "Incentive Stock Option" means an Option which meets the requirements of
Section 422 of the Code.

2.15 "Non-Qualified Stock Option" means an Option which does not meet the
requirements of Section 422 of the Code.

2.16 "Option" means an option awarded under Section 7 to purchase Shares. An
Option may be either an Incentive Stock Option or a Non-Qualified Stock Option.

2.17 "Option Exercise Period" means the period from the Option Grant Date to
the date on which an Option expires.

2.18 "Option Grant Date" means the date upon which the Committee grants an
Option to an Optionee.

2.19 "Optionee" means an employee, Director or Consultant of the Corporation
or any Subsidiary to whom an Option has been granted.

2.20 "Participant" means an employee, Director or Consultant of the
Corporation or any Subsidiary to whom an Award has been granted which has not
terminated, expired or been fully exercised.

2.21 "Plan" means this Snyder Communications, Inc. 1996 Stock Incentive Plan,
as it may be amended and restated from time to time.

2.22 "Restricted Period" means the period of time, which may be a single
period or multiple periods, during which Restricted Stock awarded to a
Participant remains subject to the Restrictions imposed on such Shares, as
determined by the Committee.

2.23 "Restricted Stock" means an award of Shares on which are imposed
Restricted Periods and Restrictions which subject the Shares to a "substantial
risk of forfeiture" as defined in Section 83 of the Code.

2.24 "Restricted Stock Agreement" means a written agreement between a
Participant and the Corporation evidencing an award of Restricted Stock.

2.25 "Restricted Stock Award Date" means the date on which the Committee
awards Restricted Shares to the Participant.

2.26 "Restrictions" means the restrictions and conditions imposed on
Restricted Stock award to a Participant, as determined by the Committee, which
must be satisfied in order for the Restricted Stock award to vest, in whole or
in part, in the Participant.

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2.27 "Shares," except as specifically provided in Section 6, means shares of
either SNC Stock or circle.com Stock, as the case may be.

2.28 "SNC Stock" means shares of the SNC stock, par value $0.001 per share,
of the Corporation.

2.29 "Stock Appreciation Right" means a right to receive the spread or
difference between the Fair Market Value of Shares subject to an Option and
the corresponding Option exercise price, either in stock or in cash, or in a
combination thereof.

2.30 "Stock Appreciation Rights Agreement" means a written agreement between
a Participant and the Corporation evidencing an award of Stock Appreciation
Rights.

2.31 "Stock Option Agreement" means a written agreement between a
Participant and the Corporation evidencing an award of an Option.

2.32 "Subsidiary" means any domestic or foreign corporation or entity of
which the Corporation owns, directly or indirectly, at least 50% of the total
combined voting power of such corporation or other entity.

2.33 "Ten Percent Shareholder" means an Optionee who, at the time an
Incentive Stock Option is granted, owns or is deemed to own stock possessing
more than 10% of the total voting power of all classes of stock of the
Corporation or any Subsidiary. For purposes of determining whether an Optionee
is a Ten Percent Shareholder, the ownership attribution rules of Section
424(d) of the Code (or its successor) shall apply.

2.34 "Voting Stock" means all capital stock of the Corporation which by its
terms is entitled under ordinary circumstances to vote in the election of
directors.

3. Administration of the Plan.

3.1 Administrator of Plan. The Plan shall be administered by such
Committee(s) of the Board as shall be appointed by the Board. Notwithstanding
the preceding, the Plan shall be administered by the Compensation Committee of
the Board in the case of all eligible employees of the Corporation or a
Subsidiary at or above the rank of Senior Vice President. If no committee of
the Board is appointed to administer the Plan with respect to a particular
group of eligible persons (other than employees at or above the rank of Senior
Vice President), the Board shall constitute the committee for such group. In
the case of Awards to Directors or Consultants, who are not employees of the
Corporation or a Subsidiary, the Board shall constitute the Committee.

3.2 Authority of Committee. The appropriate Committee shall have full power
and authority to:

(i) designate the Participants to whom Options, Restricted Stock, or
Stock Appreciation Rights may be awarded from time to time;

(ii) determine the type of Award to be granted to each Participant under
the Plan and the number and class of Shares subject thereto;

(iii) determine the duration of the Restricted Period and the
Restrictions to be imposed with respect to each Award;

(iv) interpret and construe the Plan and adopt such rules and regulations
as it shall deem necessary and advisable to implement and administer the
Plan;

(v) approve the form and terms and conditions of the Restricted Stock
Agreement, Stock Option Agreement, or Stock Appreciation Rights Agreement,
as the case may be, between the Corporation and the Participant; and

(vi) designate persons other than members of the Committee to carry out
its responsibilities, subject to such limitations, restrictions and
conditions as it may prescribe, provided that the Compensation Committee
may not delegate its authority with respect to the granting of Awards to
persons at or above the rank of Senior Vice President.

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The foregoing determinations shall be made in accordance with the Committee's
best business judgment as to the best interests of the Corporation and its
stockholders and in accordance with the purposes of the Plan.

3.3 Determinations of Committee. A majority of the Committee shall constitute
a quorum at any meeting of the Committee, and all determinations of the
Committee shall be made by a majority of its members. Any action which the
Committee shall take through a written instrument signed by all of its members
shall be as effective as though it had been taken at a meeting duly called and
held. The Committee shall report all actions taken by it to the Board.

3.4 Delegation. The Committee may delegate such non-discretionary
administrative duties under the Plan to one or more agents as it shall deem
necessary and advisable.

3.5 Effect of Committee Determinations. No members of the Committee or the
Board shall be personally liable for any action or determination made in good
faith with respect to the Plan, any Award or any settlement of any dispute
between a Participant and the Corporation. Any decision made or action taken by
the Committee or the Board with respect to an Award or the administration or
interpretation of the Plan shall be conclusive and binding upon all persons.

4. Awards Under the Plan.

Awards to a Participant under the Plan may be in the form of a Non-Qualified
Stock Option, an Incentive Stock Option, Restricted Stock, a Stock Appreciation
Right, or a combination thereof, at the discretion of the Committee. If an
Option is designated as an Incentive Stock Option, the terms of such Option
shall be in conformance with Section 422 of the Code.

5. Eligibility

The Participants in the Plan shall be the officers, key employees, Directors
and Consultants of the Corporation and its Subsidiaries designated by the
Committee. A Participant who has been granted an Award under the Plan may be
granted additional Awards under the Plan under such circumstances, and at such
times, as the Committee may determine. Incentive Stock Options may be granted
only to employees of the Corporation and its Subsidiaries.

6. Shares Subject to Plan.

Subject to adjustment as provided in Section 14, the aggregate number of
Shares which may be issued upon the exercise of Options or Stock Appreciation
Rights and the award of Restricted Stock shall not exceed ( )
Shares of SNC Stock and ( ) Shares of circle.com Stock. Subject to
adjustment as provided in Section 14, the portion of such Shares may be issued
under Incentive Stock Options pursuant to the Plan shall not exceed
( ) Shares of SNC Stock and ( ) Shares of circle.com Stock.
Subject to adjustment as provided in Section 14, the aggregate number of Shares
which may be granted pursuant to Options or Stock Appreciation Rights under
this Plan to any one Participant during any calendar year under this Plan shall
be one million (1,000,000) Shares of SNC Stock and one million (1,000,000)
Shares of circle.com Stock. If all or any portion of any outstanding Award
under the Plan for any reason expires or is terminated, the Shares allocable to
the unexercised or forfeited portion of such Award may again be subject to an
Award under the Plan.

7. Options.

7.1 Terms of Options. Options granted under the Plan shall be subject to the
following terms and conditions:

(a) Option Price. The option price per Share under each Option granted by
the Committee (the "Option Price") may not be less than 100% (110% in the
case of a Ten Percent Shareholder) of the Fair Market Value of a Share of
the applicable class of common stock on the Option Grant Date. In no event
shall the Option Price be less than the par value of such Share on the
Option Grant Date.

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(b) Vesting of Options. Except as provided in this Section 7.1, Options
granted by the Committee shall vest in accordance with the terms provided
by the Committee in the Option Agreement. The Committee may accelerate the
vesting of any Option in its discretion.

(c) Exercise of Options. Each Option shall be exercisable on the dates
and for the number of Shares as shall be provided in the related Stock
Option Agreement, provided that (i) unless provided otherwise in the Option
Agreement, an Option shall not be exercisable earlier than six months after
the Option Grant Date, and (ii) in no event shall the Option Exercise
Period exceed ten years from the Option Grant Date (five years in the case
of an Incentive Stock Option granted to a Ten Percent Shareholder).

Options may be exercised (in full or in part) only by written notice
delivered to the Corporation at its principal executive office, accompanied by
payment of the Option Price for the Shares as to which such Option is
exercised. The Option Price of each Share as to which an Option is exercised
shall be paid in full at the time of exercise (i) in cash, (ii) with Shares
owned by the Participant, (iii) by delivery to the Corporation of
(x) irrevocable instructions to deliver directly to a broker the stock
certificates representing the Shares for which the Option is being exercised,
and (y) irrevocable instructions to such broker to sell such Shares and
promptly deliver to the Corporation the portion of the proceeds equal to the
Option Price and any amount necessary to satisfy the Corporation's obligation
for withholding taxes, or (iv) any combination thereof. For purposes of making
payment in Shares, such Shares shall be valued at their Fair Market Value on
the date of exercise of the Option and shall have been held by the Participant
for at least six months.

(d) Termination of Employment or Service of Optionee. The Committee shall
have authority to determine the circumstances under which an Option will
vest upon termination of the employment or service of the Optionee for any
reason. Unless otherwise determined by the Committee, in the case of any
Non-Qualified Stock Option, the Committee shall provide that vesting of the
Option shall cease on the date of termination of employment or service and
the Option shall terminate on the date which is three months after the date
on which the Optionee terminates employment or service. In the event an
Optionee terminates employment or service by reason of the Optionee's death
or Disability, the Option shall terminate one year after the date on which
the Optionee terminates employment or service as a result of death or
Disability. In any event, each Non-Qualified Stock Option shall terminate
no later than ten years after the Option Grant Date. Unless otherwise
determined by the Committee, in the case of any Incentive Stock Option, the
Committee shall provide that the Option shall terminate on the date three
months (one year, in the event the Optionee terminates employment by reason
of the Optionee' s death or Disability) after the date on which the
Optionee terminates employment, or, if earlier, ten years after the Option
Grant Date (five years in the case of an Incentive Stock Option granted to
a Ten Percent Stockholder). Such provisions shall be contained in the
Option Agreement given to each Optionee.

(e) Rights as a Stockholder. An Optionee or a transferee of an Option
shall have no rights as a stockholder with respect to any Shares covered by
any Option until the date of the issuance of a stock certificate to such
person evidencing such Shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property)
or distributions or other rights for which the record date is prior to the
date such stock certificate is issued, except as provided in Section 14.

(f) Investment Purpose. The Corporation shall not be obligated to sell or
issue any Shares pursuant to any Option unless the Shares with respect to
which the Option is being exercised are at that time registered or exempt
from registration under the Securities Act of 1933, as amended.

(g) Assumption of Options. The Corporation may issue or assume under the
Plan any stock option previously granted by the Corporation or in
connection with any transaction or transactions upon such terms and
conditions and, in the case of any option so assumed, with such
modifications or adjustments therein, as shall be determined by the
Committee. Any such option so issued or assumed shall be deemed to be an
Option granted under this Plan, notwithstanding that any provision of this
Plan would not, except for this Section 7, permit the grant of an option
having the terms and conditions, including the option price, of such option
as so issued or assumed.

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(h) Incentive Stock Options. In the case of an Incentive Stock Option granted
under the Plan, the aggregate Fair Market Value (determined at the Option Grant
Date) of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by an Optionee during any calendar year under
all incentive stock option plans of the Corporation and its Subsidiaries may
not exceed $100,000.

(i) Forfeiture of Options for Misconduct. If the President of the Corporation
or his or her designee reasonably believes an Optionee (other than the
President of the Corporation) has committed an act of misconduct described in
this subparagraph (i) or the Chairman of the Committee reasonably believes the
President of the Corporation has committed an act of misconduct described in
this subparagraph (i), the President or Chairman, as appropriate, may suspend
the Optionee's rights to exercise any Option pending a determination by the
Committee. If the Committee determines an Optionee has committed an act of
embezzlement, fraud, dishonesty, nonpayment of any obligation owed to the
Corporation, breach of fiduciary duty or deliberate disregard of Corporation
policy resulting in loss, damage, or injury to the Corporation, or if an
Optionee makes any unauthorized disclosure of any trade secret or confidential
information, breaches any written agreement with the Corporation, engages in
any conduct constituting unfair competition, induces any customer to breach a
contract with the Corporation, or solicits or attempts to solicit any employee
of the Corporation to terminate employment with the Corporation, neither the
Optionee nor the Optionee's estate shall be entitled to exercise any Option
whatsoever. In making such determination, the Committee shall act fairly and
shall give the Optionee an opportunity to appear and present evidence on his or
her behalf at a hearing before the Committee.

(j) Transferability of Options. Section 10 to the contrary notwithstanding,
if the Committee so provides in the Option Agreement, an Option that is not an
Incentive Stock Option may be transferred by an Optionee to the Optionee's
children, grandchildren, spouse, one or more trusts for the benefit of such
family members or a partnership in which such family members are the only
partners; provided, however, that Optionee may not receive any consideration
for the transfer. The holder of an Option transferred pursuant to this section
shall be bound by the same terms and conditions that governed the Option during
the period that it was held by the Participant. In the event of any such
transfer, the Option and any SAR that relates to such Option must be
transferred to the same person or persons or entity or entities.

(k) Notice of Disposition of Shares. An Optionee shall give written notice to
the Corporation of the Optionee's intent to make any disposition of the Shares
acquired upon the exercise of an Incentive Stock Option if such disposition
occurs within two years of the Option Grant Date or within one year of the date
the Incentive Stock Option was exercised. If the Corporation or Subsidiary is
required to withhold federal, state or local taxes as a result of such
disposition, the Optionee shall be required to make appropriate arrangements
with the Corporation or Subsidiary, as the case may be, for satisfaction of any
federal, state or local taxes the Corporation or Subsidiary is required to
withhold as a condition precedent to the transfer of the Shares by the
Corporation's transfer agent. Any Shares issued to a Participant upon exercise
of an Incentive Stock Option shall bear a legend reflecting this restriction.

8. Restricted Stock.

8.1 Terms of Restricted Stock Awards. Subject to and consistent with the
provisions of the Plan, with respect to each Award of Restricted Stock to a
Participant, the Committee shall determine:

(a) the terms and conditions of the Restricted Stock Agreement between
the Corporation and the Participant evidencing the Award;

(b) the Restricted Period for all or a portion of the Award;

(c) the Restrictions applicable to the Award, including, but not limited
to, continuous employment with the Corporation or any of its Subsidiaries
for a specified term or the attainment of specific corporate, divisional or
individual performance standards or goals, which Restricted Period and
Restrictions may differ with respect to each Participant;

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<PAGE>

(d) whether the Participant shall receive the dividends and other
distributions paid with respect to an Award of Restricted Stock as declared
and paid to the holders of the Shares during the Restricted Period or shall
be withheld by the Corporation for the account of the Participant until the
Restricted Periods have expired or the Restrictions have been satisfied,
and whether interest shall be paid on such dividends and other
distributions withheld, and if so, the rate of interest to be paid, or
whether such dividends may be reinvested in Shares;

(e) the percentage of the Award which shall vest in the Participant in
the event of such Participant's death or Disability prior to the expiration
of the Restricted Period or the satisfaction of the Restrictions applicable
to an award of Restricted Stock; or

(f) notwithstanding the Restricted Period and the Restrictions imposed on
the Restricted Shares, as set forth in a Restricted Stock Agreement,
whether to shorten the Restricted Period or waive any Restrictions, if the
Committee concludes that it is in the best interests of the Corporation to
do so.

8.2 Delivery of Shares. Upon an Award of Restricted Stock to a Participant,
the stock certificate representing the Restricted Stock shall be issued and
transferred to and in the name of the Participant, whereupon the Participant
shall become a stockholder of the Corporation with respect to such Restricted
Stock and shall be entitled to vote the Shares. Such stock certificate shall be
held in custody by the Corporation, together with stock powers executed by the
Participant in favor of the Corporation, until the Restricted Period expires
and the Restrictions imposed on the Restricted Stock are satisfied.

9. Stock Appreciation Rights.

9.1 Grants of Stock Appreciation Rights. Stock Appreciation Rights ("SARs")
may be granted in conjunction with all or a part of any Option granted under
the Plan, either at the time of the grant of such Option or at any subsequent
time prior to the expiration of such Option; provided, however, that SARs shall
not be offered or granted in connection with a prior Option without the consent
of the holder of such Option. SARs may not be exercised by an Optionee who is a
director or officer (within the meaning of Rule 16a-1(f) under the Exchange
Act) of the Corporation within six months after the SAR is granted, except that
this limitation shall not be applicable in the event of the death or Disability
of such Optionee occurring prior to the expiration of such six-month period.

9.2 Terms of Stock Appreciation Rights. All SARs shall be subject to the
following terms and conditions:

(a) SARs shall be exercisable only at such time and to the extent that
the Option to which they relate (the "Related Option") shall be
exercisable. SARs and the Related Option may be exercised concurrently only
when the Related Option is a Non-Qualified Stock Option.

(b) Upon exercise of a SAR, the Optionee shall be entitled to the
difference between the Fair Market Value of one Share and the Option Price
of one Share specified in the Related Option times the number of Shares in
respect of which the SARs shall have been exercised ("the Economic Value").
An Optionee, upon the exercise of SARs, shall receive the Economic Value
thereof, and the Committee in its sole discretion shall determine the form
in which payment of such Economic Value will be made, whether in cash,
Shares or any combination thereof. For purposes of this Section 9.2(b), the
Fair Market Value of the Shares shall be determined as of the date of
exercise of the SAR.

(c) An SAR may be exercised without exercising the Related Option, but
the Related Option shall be canceled for all purposes under the Plan to the
extent of the SAR exercise. A Related Option may be exercised without
exercising the SAR, but the SAR shall be canceled for all purposes under
the Plan to the extent of the Related Option Exercise.

(d) In addition to the conditions set forth above, SARs issued in
connection with Incentive Stock Options shall meet the following
conditions:

(i) Each SAR must expire not later than the expiration of the Related
Option.

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<PAGE>

(ii) The SAR shall be transferable only when the Related Option is
transferable and under the same conditions.

(iii) The SAR may be exercised only when the Fair Market Value of the
Shares subject to the Related Option exceeds the exercise price of the
Related Option.

10. Non-Transferability of Awards.

Except as may be provided by the Committee in accordance with Section
7.1(j), Awards granted under the Plan shall not be transferable by the
Participant during the Participant's lifetime and may not be assigned,
exchanged, pledged, transferred or otherwise encumbered or disposed of except
pursuant to a qualified domestic relations order, by will or by the applicable
laws of descent and distribution. Except as may be provided by the Committee
in accordance with Section 7.1(j), Options and Stock Appreciation Rights shall
be exercisable during the Participant's lifetime only by the Participant or by
the Participant's guardian or legal representative.

11. Withholding of Taxes.

Federal, state or local law may require the withholding of taxes applicable
to income resulting from an Award. A Participant shall be required to make
appropriate arrangements with the Corporation or Subsidiary, as the case may
be, for satisfaction of any federal, state or local taxes the Corporation or
Subsidiary is required to withhold. The Committee may, in its discretion and
subject to such rules as it may adopt, permit the Participant to pay all or a
portion of the federal, state or local withholding taxes arising in connection
with an Award by electing to (i) have the Corporation withhold Shares, (ii)
tender back Shares received in connection with such Award or (iii) deliver
other previously owned Shares, under each election such Shares having a Fair
Market Value on the date specified in the rules adopted by the Committee equal
to the amount to be withheld. The Corporation shall be under no obligation to
issue Shares to the Participant unless the Participant has made the necessary
arrangements for payment of the applicable withholding taxes.

12. No Right to Continued Employment.

Neither the establishment of the Plan nor the granting of an Award shall
confer upon any Participant any right to continue in the employ of the
Corporation or any of its Subsidiaries or interfere in any way with the right
of the Corporation or any of its Subsidiaries to terminate such employment at
any time. No Award shall be deemed to be salary or compensation for the
purpose of computing benefits under any employee benefit, pension or
retirement plans of the Corporation or any of its Subsidiaries, unless the
Committee shall determine otherwise.

13. Amendment.

13.1 Amendment and Termination of Awards. The terms and conditions
applicable to any Award may thereafter be amended or modified by mutual
agreement between the Corporation and the Participant or such other persons as
may then have an interest therein. Also, by mutual agreement between the
Corporation and a Participant in the Plan or under any other present or future
plan of the Corporation, Options or other Awards may be granted to a
Participant in substitution and exchange for, and in cancellation of, any
Awards previously granted to the Participant under the Plan, or under any
other future plan of the Corporation.

13.2 Amendment and Termination of Plan. The Board may amend the Plan from
time to time, except that, without approval of the stockholders of the
Corporation, no such revision or amendment shall change the number of Shares
which may be issued pursuant to the exercise of Incentive Stock Options
subject to the Plan, change the designation of the classes of employees,
Directors or Consultants eligible to receive Options, decrease the price at
which Incentive Stock Options may be granted or remove the administration of
the Plan from the Committee. Unless sooner terminated as provided herein, the
Plan shall terminate on the tenth anniversary of its effective date. The Board
may terminate this Plan at any time it deems advisable, except that Options,
Restricted Stock and Stock Appreciation Rights granted under the Plan before
its termination shall continue to be administered under the Plan until such
Options and Stock Appreciation Rights are canceled, terminated, or are
exercised and the Restricted Stock is canceled, vested or is forfeited.

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14. Changes in Capitalization.

Subject to any required action by the stockholders, the number of Shares
covered by each outstanding Award and the exercise price per each such Share
subject to an Option or Stock Appreciation Right shall be proportionately
adjusted for any increase or decrease in the number of issued Shares of the
Corporation resulting from a subdivision or consolidation of Shares or the
payment of a stock dividend (but only on the Shares) or any other increase or
decrease in the number of such Shares effected without receipt of consideration
by the Corporation.

If the Corporation merges or is consolidated with another corporation,
whether or not the Corporation is a surviving corporation, or if the
Corporation is liquidated or sells or otherwise disposes of substantially all
of its assets while unexercised Options remain outstanding under the Plan, (i)
after the effective date of the merger, consolidation, liquidation, sale or
other disposition, as the case may be, each holder of an outstanding Option
shall be entitled, upon exercise of that Option, to receive, in lieu of Shares,
the number and class or classes of shares of stock or other securities or
property to which the holder would have been entitled if, immediately prior to
the merger, consolidation, liquidation, sale or other disposition, the holder
had been the holder of record of a number of Shares equal to the number of
Shares as to which that Option may be exercised; or (ii) if Options have not
already become exercisable, the Committee may waive any limitations set forth
in or imposed pursuant to the Plan so that all Options, from and after a date
prior to the effective date of that merger, consolidation, liquidation, sale or
other disposition, as the case may be, specified by the Committee, shall be
exercisable in full.

If the Corporation is merged into or consolidated with another corporation
under circumstances where the Corporation is not the surviving corporation
(other than circumstances involving a mere change in the identity, form or
place of organization of the Corporation), or if the Corporation is liquidated
or dissolved, or sells or otherwise disposes of substantially all of its assets
to another entity while unexercised Options remain outstanding under the Plan,
unless provisions are made in connection with the transaction for the
continuance of the Plan and/or the assumption or substitution of Options with
new options covering the stock of the successor corporation, or the parent or
subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and exercise prices, then all outstanding Options shall be canceled as
of the effective date of such merger, consolidation, liquidation, dissolution,
or sale.

In the event of a change of all of the Corporation's authorized Shares with
par value into the same number of Shares with a different par value or without
par value, the Shares resulting from any such change shall be deemed to be the
Shares within the meaning of the Plan.

To the extent that the foregoing adjustments relate to stock or securities of
the Corporation, such adjustments shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive; provided,
that each Option which, upon grant of the Option, is specifically designated as
an Incentive Stock Option shall not be adjusted in a manner that causes the
Option to fail to continue to qualify as an Incentive Stock Option.

Except as hereinbefore expressly provided in this Section 14, the Participant
shall have no rights (i) by reason of any subdivision or consolidation of
shares of stock of any class, the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class, or (ii) by
reason of any dissolution, liquidation, merger, or consolidation, spin-off of
assets or stock of another corporation, or any issue by the Corporation of
shares of stock of any class, nor shall any of these actions affect, or cause
an adjustment to be made with respect to, the number or price of Shares subject
to any Option.

The grant of any Award pursuant to the Plan shall not affect in any way the
right or power of the Corporation (i) to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, (ii) to merge
or consolidate, (iii) to dissolve, liquidate, or sell or transfer all or any
part of its business or assets or (iv) to issue any bonds, debentures,
preferred or other preference stock ahead of or affecting the

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Shares. If any action described in the preceding sentence results in a
fractional Share for any Participant under any Award hereunder, such fraction
shall be completely disregarded and the Participant shall only be entitled to
the whole number of Shares resulting from such adjustment.

15. Governing Law.

The Plan and each Stock Option Agreement, Restricted Stock Agreement and
Stock Appreciation Rights Agreement shall be governed by, and construed in
accordance with, the laws of the State of Maryland.

16. Effective Date.

The Plan as amended shall be effective on , 1999, subject to the approval
of the Plan within one year of such date by a majority of the voting shares
represented and entitled to vote.

SNYDER COMMUNICATIONS, INC.

By: _________________________________

Name:
Title:

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<PAGE>

ANNEX C
SNYDER COMMUNICATIONS, INC.

AMENDED AND RESTATED
EMPLOYEE STOCK PURCHASE PLAN
(Effective , 1999)

ARTICLE I

Introduction

Section 1.01. Statement of Purpose. The purpose of the Snyder Communications,
Inc. Employee Stock Purchase Plan is to provide employees of the Company and
its Subsidiaries, who wish to become stockholders, an opportunity to purchase
Stock of the Company. The Board of Directors of the Company believes that
employee participation in ownership will be to the mutual benefit of the
employees and the Company.

Section 1.02. Internal Revenue Code Considerations. The Plan is intended to
constitute an "employee stock purchase plan" within the meaning of section 423
of the Internal Revenue Code of 1986, as amended.

ARTICLE II

Definitions

Section 2.01. "Administrative Committee" means the committee appointed by the
Board to administer the Plan, as provided in Section 6.04 hereof.

Section 2.02. "Board" means the Board of Directors of the Company.

Section 2.03. "circle.com Stock," means shares of circle.com stock, par value
$0.001 per share, of the Company.

Section 2.04. "Code" means the Internal Revenue Code of 1986, as amended.

Section 2.05. "Company" means Snyder Communications, Inc., a Delaware
corporation.

Section 2.06. "Compensation" means the total remuneration paid, during the
period of reference, to a Participant by the Company or a Subsidiary, including
regular salary or wages, overtime payments, bonuses, commissions and vacation
pay, to which has been added (a) any elective deferral amounts by which the
Participant has had his current remuneration reduced for the purposes of
funding a contribution to any plan sponsored by the Company and satisfying the
requirements of section 401(k) of the Code, and (b) any amounts by which the
Participant's compensation has been reduced pursuant to a compensation
reduction agreement between the Participant and the Company for the purpose of
funding benefits through any cafeteria plan sponsored by the Company meeting
the requirements of section 125 of the Code. There shall be excluded from
"Compensation" for the purposes of the Plan, whether or not reportable as
income by the Participant, expense reimbursements of all types, payments in
lieu of expenses, the Company contributions to any qualified retirement plan or
other program of deferred compensation (except as provided above), the Company
contributions to Social Security or worker's compensation, the costs paid by
the Company in connection with fringe benefits and relocation, including gross-
ups, any amounts accrued for the benefit of the Participant, but not paid,
during the period of reference, and any gains (realized or unrealized) that may
result from participation in any of the Company's stock option plans.

Section 2.07. "Effective Date" shall mean [date], 1999.

Section 2.08. "Employee" means each individual who is an employee of the
Company or a Subsidiary for purposes of federal tax withholding; provided,
however, that the term Employee shall not include any

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<PAGE>

individual (i) whose customary employment is 20 hours or less per week, (ii)
who for purposes of section 423(b)(3) of the Code, is deemed to own stock
possessing five percent (5%) or more of the total combined voting power or
value of all classes of stock of the Company, or (iii) who is on an approved
leave of absence that has exceeded 90 days and whose right to reemployment is
not guaranteed either by statute or by contract.

Section 2.09. "Exercise Date" means the last day of each Purchase Period, as
determined by the Administrative Committee.

Section 2.10. "Market Value" means, with respect to Stock, the fair market
value of such Stock, determined by such methods or procedures as shall be
established from time to time by the Administrative Committee, provided,
however, that if the Stock is listed on a national securities exchange or
quoted in an interdealer quotation system, the Market Value of such Stock on a
given date shall be based upon the last sales price or, if unavailable, the
average of the closing bid and asked prices per share of the Stock on such date
(or, if there was no trading or quotation in the Stock on such date, on the
next preceding date on which there was trading or quotation) as provided by one
of such organizations.

Section 2.11. "Offering" means the offering of shares of Stock under the
Plan.

Section 2.12. "Offering Date" means the date on which each Offering is to
commence, as determined by the Administrative Committee.

Section 2.13. "Participant" means each Employee who elects to participate in
the Plan.

Section 2.14. "Plan" means the Snyder Communications, Inc. Employee Stock
Purchase Plan, as the same is set forth herein and as the same may hereafter be
amended.

Section 2.15. "Purchase Agreement" means the document prescribed by the
Administrative Committee pursuant to which an Employee has enrolled to be a
Participant.

Section 2.16. "Purchase Period" means the period beginning on an Offering
Date and ending on the Exercise Date; provided, however, that no Purchase
Period shall exceed 27 months in duration.

Section 2.17. "Purchase Price" means such term as it is defined in Section
4.03 hereof.

Section 2.18. "SNC Stock" means shares of SNC stock, par value $0.001 per
share, of the Company.

Section 2.19. "Stock" means either SNC Stock or circle.com Stock, as the case
may be.

Section 2.20. "Stock Purchase Account" means a noninterest bearing
bookkeeping entry which shall record all amounts withheld from a Participant's
compensation for the purpose of purchasing shares of Stock for such employee
under the Plan, reduced by all amounts applied to the purchase of Stock for
such Participant under the Plan. The Company shall not be required to segregate
or set aside any amounts so withheld, and such bookkeeping entry shall not
represent an interest in any assets of the Company.

Section 2.21. "Subsidiary" shall mean a corporation described in section
424(f) of the Code that has, with the permission of the Board, adopted the
Plan.

ARTICLE III

Admission to Participation

Section 3.01. Initial Participation. With respect to any Purchase Period, an
Employee who is employed as of the first day of such Purchase Period may elect
to be a Participant and may become a Participant by executing and filing with
the Administrative Committee a Purchase Agreement at such time in advance and
on such forms as prescribed by the Administrative Committee. The effective date
of an Employee's participation shall be the Offering Date next following the
date on which the Administrative Committee receives from the Employee a
properly executed and timely filed Purchase Agreement. Participation in the
Plan will continue automatically from one Purchase Period until participation
is discontinued pursuant to Section 3.02 or 3.03.

C-2
<PAGE>

Section 3.02. Voluntary Discontinuance of Participation. Any Participant may
voluntarily withdraw from the Plan by filing a notice of withdrawal with the
Administrative Committee at such time in advance as the Administrative
Committee may specify. Upon such withdrawal, there shall be paid to the
Participant the amount, if any, standing to his credit in his Stock Purchase
Account.

Section 3.03. Involuntary Discontinuance of Participation. If a Participant
ceases to be employed by the Company or a Subsidiary, participation in the Plan
shall cease and the entire amount, if any, standing to the Participant's credit
in his Stock Purchase Account shall be refunded to him. If a Participant
remains employed by the Company or a Subsidiary, but ceases to be an Employee,
he may continue to participate in the Plan through the end of the Purchase
Period in which such cessation occurs, but may participate thereafter only
pursuant to Section 3.05.

Section 3.04. Refund of Balance in Stock Purchase Account. The amount
credited to a Participant's Stock Purchase Account that cannot be applied by
reason of the limitations described in Section 4.02 or 4.04(c) shall be
refunded to him as soon as administratively practicable.

Section 3.05. Readmission to Participation. Any individual who has previously
been a Participant, who has discontinued participation, and who wishes to be
reinstated as a Participant may again become a Participant for any subsequent
Purchase Period if on the first day of such Purchase Period he is an Employee,
by executing and filing with the Administrative Committee, at such time in
advance as the Administrative Committee shall determine, a new Purchase
Agreement on forms provided by the Administrative Committee. Reinstatement to
Participant status shall be effective as of the Offering Date next following
the date on which the Administrative Committee receives from the Employee the
properly executed and timely filed Purchase Agreement.

ARTICLE IV

Stock Purchase

Section 4.01. Reservation of Shares. There shall be 2.5 million shares of SNC
Stock and 625,000 shares of circle.com Stock reserved for the Plan, subject to
adjustment in accordance with the antidilution provisions hereinafter set
forth. Except as provided in Section 5.02 hereof, the aggregate number of
shares that may be purchased under the Plan shall not exceed the number of
shares reserved for the Plan.

Section 4.02. Limitation on Shares Available. The maximum number of shares of
each class of Stock that may be purchased for each Participant on an Exercise
Date is the least of (a) the number of shares of such Stock that can be
purchased by applying the full balance of his Stock Purchase Account to such
purchase of shares at the Purchase Price (as hereinafter determined), (b) the
Participant's proportionate part of the maximum number of whole shares of such
Stock available within the limitation established by the maximum aggregate
number of such shares reserved for the Plan, as stated in Section 4.01 hereof,
or (c) 800. Notwithstanding the foregoing, if any person entitled to purchase
shares pursuant to any offering hereunder would be deemed for the purposes of
section 423(b)(3) of the Code to own stock (including any number of shares that
such person would be entitled to purchase hereunder) possessing five percent
(5%) or more of the total combined voting power or value of all classes of
stock of Company, the maximum number of shares that such person shall be
entitled to purchase pursuant to the Plan shall be reduced to that number
which, when added to the number of shares of Stock that such person is so
deemed to own (excluding any number of shares that such person would be
entitled to purchase hereunder), is one less than such five percent (5%).

Section 4.03. Purchase Price of Shares. The Purchase Price per share of the
Stock sold to Participants pursuant to any Offering shall be eighty-five
percent (85%) of the Market Value of such share on the Exercise Date. If the
Exercise Date with respect to the purchase of Stock is a day on which the stock
is selling ex-dividend but is on or before the record date for such dividend,
then for Plan purposes the Purchase Price per share will be increased by an
amount equal to the dividend per share. In no event shall the Purchase Price be
less than the par value of the Stock.

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<PAGE>

Section 4.04. Exercise of Purchase Privilege.

(a) Subject to the provisions of Section 4.02 above, if on any Exercise
Date there is a credit balance in the Participant's Stock Purchase Account,
there shall be purchased for the Participant at the Purchase Price for the
Purchase Period that expires on such Exercise Date the largest number of
whole shares of one or both classes of Stock, as can be purchased with the
entire amount then standing to the Participant's credit in his Stock
Purchase Account. Each such purchase shall be deemed to have occurred on
the Exercise Date occurring at the close of the Offering for which the
purchase was made.

(b) Any credit remaining in the Stock Purchase Account on the Exercise
Date after the purchase of the maximum number of whole shares shall remain
in the Stock Purchase Account to the credit of the Participant and applied
to purchase additional shares of Stock on subsequent Exercise Dates.

(c) Notwithstanding anything contained herein to the contrary, a
Participant may not during any calendar year purchase shares of Stock
having an aggregate Market Value, determined at the time of each Offering
Date during such calendar year, of more than $25,000.

Section 4.05. Establishment of Stock Purchase Account. Each Participant shall
authorize payroll deductions from Compensation for the purposes of crediting
his Stock Purchase Account. In the Purchase Agreement, each Participant shall
authorize a deduction from each payment of his Compensation during a Purchase
Period, subject to Section 4.04(c). Subject to Section 3.02, a Participant may
not reduce or increase his payroll deduction rate during any Purchase Period.
However, a Participant may change the deduction to any permissible level for
any subsequent Offering by filing notice thereof at such time preceding the
Offering Date on which such subsequent Offering commences as the Administrative
Committee shall determine. Payroll deductions are the only method by which the
Stock Purchase Account can be credited. All Payroll deductions shall remain
part of the Company's general assets until they are applied to purchase Stock
under the Plan, and until such time may be used by the Company for any
corporate purpose.

Section 4.06. Payment for Stock. The Purchase Price for all shares of Stock
purchased by a Participant under the Plan shall be paid out of the credit in
the Participant's Stock Purchase Account. As of each Exercise Date, the entire
amount standing to the credit of each Participant in his Stock Purchase Account
on the date of the last paycheck issued to the Participant prior to the
Exercise Date in the Purchase Period that expires on such Exercise Date shall
be charged with the aggregate Purchase Price of the shares of Stock purchased
by such Participant on the Exercise Date. No interest shall be paid or payable
with respect to any amount credited to the Participant's Stock Purchase
Account.

Section 4.07. Share Ownership; Issuance of Certificates.

(a) The shares purchased by a Participant on an Exercise Date shall, for
all purposes, be deemed to have been issued and/or sold at the close of
business on such Exercise Date. Prior to that time, none of the rights or
privileges of a stockholder of the Company shall inure to the Participant
with respect to such shares. All the shares of Stock purchased under the
Plan shall be delivered by the Company in a manner as determined by the
Administrative Committee.

(b) The Administrative Committee, in its sole discretion, may determine
that the shares of Stock shall be delivered by the Company (i) by issuing
and delivering to the Participant a certificate for the number of whole
shares of Stock purchased by such Participant on an Exercise Date or during
a Calendar year, or (ii) by issuing and delivering a certificate or
certificates for the number of shares of Stock purchased by all
Participants on an Exercise Date or during a Calendar year to a member firm
of the New York Stock Exchange which is also a member of the National
Association of Securities Dealers, as selected by the Administrative
Committee from time to time, which shares shall be maintained by such
member firm in separate brokerage accounts of each Participant, or (iii) by
issuing and delivering a certificate or certificates for the number of
shares of Stock purchased by all Participants on an Exercise Date or during
the calendar year to a bank or trust company or affiliate thereof, as
selected by the Administrative Committee from time to time, which shares
shall be maintained by such bank or trust company or affiliate

C-4
<PAGE>

in separate accounts for each Participant or, if he designates on his Stock
Purchase Agreement, in his name jointly with his spouse, with right of
survivorship. A Participant who is a resident of a jurisdiction that does
not recognize such joint tenancy may have a certificate or account in his
name as tenant in common with his spouse, without right of survivorship.
Such designation may be changed by filing a notice thereof signed by the
Participant and his spouse. Such spouse shall be bound by all of the terms
and conditions of the Plan as if such spouse were a Participant.

Section 4.08. Restrictions on Resale. Stock acquired under the Plan may not
be sold or otherwise disposed of for at least three months after the Exercise
Date on which the shares were acquired, except in the case of death or
disability.

ARTICLE V

Special Adjustments

Section 5.01. Shares Unavailable. If, on any Exercise Date, the aggregate
funds available for the purchase of Stock would purchase a number of shares in
excess of the number of shares then available for purchase under the Plan, the
following events shall occur:

(a) The number of shares that would otherwise be purchased by each
Participant shall be proportionately reduced on the Exercise Date in order
to eliminate such excess;

(b) The Plan shall automatically terminate immediately after the Exercise
Date as of which the supply of available shares is exhausted; and

(c) Any amount then standing to the credit of the Stock Purchase Account
of each of the Participants shall be repaid to such Participants.

Section 5.02. Antidilution Provisions. The aggregate number and kind of
shares of Stock reserved for purchase under the Plan, as hereinabove provided,
and the calculation of the Purchase Price per share may be appropriately
adjusted to reflect any increase or decrease in the number of issued shares of
Stock resulting from a subdivision or consolidation of shares or other capital
adjustment, or the payment of a stock dividend, or other increase or decrease
in such shares, if effected without receipt of consideration by the Company.
Any such adjustment shall be made by the Administrative Committee acting with
the consent of, and subject to the approval of, the Board. The determination of
such adjustment shall be final.

Section 5.03. Effect of De-listing. If the Stock shall cease for any reason
to be listed on any nationally recognized stock exchange or quotation system,
the Plan and any Offering hereunder shall thereupon terminate, and the balance
then standing to the credit of each Participant in his Stock Purchase Account
shall be returned to him.

ARTICLE VI

Miscellaneous

Section 6.01. Nonalienation. The right to purchase shares of Stock under the
Plan is personal to the Participant, is exercisable only by the Participant
during his lifetime except as hereinafter set forth, and may not be assigned or
otherwise transferred by the Participant. Notwithstanding the foregoing, there
shall be delivered to the executor, administrator or other personal
representative of a deceased Participant such shares of Stock and such residual
balance as may remain in the Participant's Stock Purchase Account as of the
date the Participant's death occurs. However, such representative shall be
bound by the terms and conditions of the Plan as if such representative were a
Participant.

Section 6.02. Administrative Costs. The Company shall pay all administrative
expenses associated with the operation of the Plan. No administrative charges
shall be levied against the Stock Purchase Accounts of the Participants.

C-5
<PAGE>

Section 6.03. Collection of Taxes. The Company shall be entitled to require
any Participant to remit, through payroll withholding or otherwise, any tax
that it determines it is so obligated to collect with respect to the issuance
of Stock hereunder, or the subsequent sale or disposition of such Stock, and
the Administrative Committee shall institute such mechanisms as shall insure
the collection of such taxes.

Section 6.04. Administrative Committee. The Board shall appoint an
Administrative Committee, which shall have the authority and power to
administer the Plan and to make, adopt, construe, and enforce rules and
regulations not inconsistent with the provisions of the Plan. The
Administrative Committee shall adopt and prescribe the contents of all forms
required in connection with the administration of the Plan, including, but not
limited to, the Purchase Agreement, payroll withholding authorizations,
withdrawal documents, and all other notices required hereunder. The
Administrative Committee shall have the fullest discretion permissible under
law in the discharge of its duties. The Administrative Committee's
interpretations and decisions in respect of the Plan, the rules and regulations
pursuant to which it is operated, and the rights of Participants hereunder
shall be final and conclusive.

Section 6.05. Amendment of the Plan. The Board may amend the Plan without the
consent of stockholders or Participants, except that any such action shall be
subject to the approval of the Company's stockholders at or before the next
annual meeting of stockholders for which the record date is after such Board
action if such stockholder approval is required by any federal or state law or
regulation or the rules of any stock exchange or automated quotation system on
which the Stock may then be listed or quoted, and the Board may otherwise, in
its discretion, determine to submit other such changes to the Plan to
stockholders for approval; provided, however, that, without the consent of an
affected Participant, no such action may materially impair the rights of such
Participant under any award theretofore granted to him.

Section 6.06. Termination of the Plan. The Plan shall continue in effect
unless terminated pursuant to action by the Board, which shall have the right
to terminate the Plan at any time without prior notice to any Participant and
without liability to any Participant. Upon the termination of the Plan, the
balance, if any, then standing to the credit of each Participant in his Stock
Purchase Account shall be refunded to him.

Section 6.07. Repurchase of Stock. The Company shall not be required to
purchase or repurchase from any Participant any of the shares of Stock that the
Participant acquired under the Plan.

Section 6.08. Notice. A Purchase Agreement and any notice that a Participant
files pursuant to the Plan shall be on the form prescribed by the
Administrative Committee and shall be effective only when received by the
Administrative Committee. Delivery of such forms may be made by hand or by
certified mail, sent postage prepaid, to Snyder Communications, Inc., 6903
Rockledge Drive, Two Democracy Center, Suite 1400, Bethesda, MD 20817,
Attention: Stock Purchase Plan Committee. Delivery by any other mechanism shall
be deemed effective at the option and discretion of the Administrative
Committee.

Section 6.09. Government Regulation. The Company's obligation to sell and to
deliver the Stock under the Plan is at all times subject to all approvals of
any governmental authority required in connection with the authorization,
issuance, sale or delivery of such Stock.

Section 6.10. Headings, Captions, Gender. The headings and captions herein
are for convenience of reference only and shall not be considered as part of
the text. The masculine shall include the feminine, and vice versa.

Section 6.11. Severability of Provisions; Prevailing Law. The provisions of
the Plan shall be deemed severable. In the event any such provision is
determined to be unlawful or unenforceable by a court of competent jurisdiction
or by reason of a change in an applicable statute, the Plan shall continue to
exist as though such provision had never been included therein (or, in the case
of a change in an applicable statute, had been deleted as of the date of such
change). The Plan shall be governed by the laws of the State of Delaware, to
the extent such laws are not in conflict with, or superseded by, federal law.

C-6
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+Information contained herein is subject to completion or amendment. A +
+registration statement on Form 10 relating to these securities has been filed +
+with the Securities and Exchange Commission. These securities will not be +
+issued prior to the time the registration statement becomes effective. This +
+preliminary information statement shall not constitute an offer to sell or +
+the solicitation of an offer to buy these securities. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

ANNEX D

PRELIMINARY COPY, DATED JUNE 28, 1999

--FOR INFORMATION ONLY--

INFORMATION STATEMENT

[LOGO] SNYDER HEALTHCARE SERVICES, INC.

Common Stock
(par value $0.001 per share)

<TABLE>
<S> <C>
Consider carefully the
risk factors beginning We have prepared this information statement to provide you
on page 12 of this with information regarding the pro rata distribution to
information statement. Snyder Communications, Inc. common stockholders of all of the
shares of common stock of Snyder Healthcare Services, Inc.,
which will be a newly-formed company conducting the business
Stockholder approval currently conducted by Snyder's healthcare services group.
of the distribution of
SHS common stock is The shares of SHS common stock will be distributed on the
not required. We are not effective date of the distribution, which is , 1999, to
asking you for a holders of Snyder common stock at the close of business on
proxy and we request the record date for the distribution, which is , 1999.
that you do not send us
a proxy. Also, you are If you are a Snyder common stockholder at the close of
not required to make business on the record date, you will receive one share of
any payment for the SHS common stock for every two shares of Snyder common stock
shares of SHS common you hold. Certificates for the shares will be mailed on or
stock. about , 1999. You will receive a check for the cash
equivalent of any fractional shares you otherwise would have
received in the distribution.
This information state-
ment is not an offer to If you have any questions regarding the distribution, you
sell, or a solicitation of may call American Stock Transfer and Trust Company at
an offer to buy, any (800) 937-5449, the distribution agent, or Snyder's investor
securities of Snyder or relations contact at (301) 468-1010.
SHS.
</TABLE>

No public market currently exists for the SHS common stock. However, we are
seeking to list the SHS common stock on the Nasdaq National Market. If the
shares are accepted for listing on the Nasdaq National Market, we expect that a
"when-issued" market will develop on or shortly before the record date and
regular trading will begin on the first business day after the effective date
of the distribution.

Proposed Nasdaq National Market Trading Symbol

" "

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved the SHS common stock, or determined if
this information statement is truthful or complete. Any representation to the
contrary is a criminal offense.

We first mailed this information statement to Snyder stockholders on ,
1999.

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Item Page
- ---- ----
<S> <C>
SUMMARY.................................................................. 1
Snyder Healthcare Services, Inc. ...................................... 1
Questions and Answers About SHS and the Distribution................... 2
Key Terms of the Distribution.......................................... 5
Information Regarding the Distribution and SHS......................... 6
Reasons for Furnishing This Information Statement...................... 7
Forward-Looking Statements............................................. 7
Summary Historical Financial Data...................................... 8
Summary Unaudited Pro Forma Financial Data............................. 9
THE DISTRIBUTION......................................................... 11
Background and Reasons for the Distribution............................ 11
Manner of Effecting the Distribution................................... 11
Risk Factors........................................................... 12
Material Federal Income Tax Consequences............................... 16
Market for SHS Common Stock............................................ 17
Dividend Policy........................................................ 17
Distribution Conditions and Termination................................ 18
RELATIONSHIP AND AGREEMENTS BETWEEN SHS AND SNYDER AFTER THE
DISTRIBUTION............................................................ 19
General................................................................ 19
Distribution Agreement................................................. 19
Tax Sharing Agreement.................................................. 20
Transitional Services Agreement........................................ 20
Employee Benefits Agreement............................................ 20
Other Agreements....................................................... 20
BUSINESS................................................................. 21
Overview............................................................... 21
Trends Affecting Growth................................................ 21
The SHS Solution....................................................... 23
SHS's Operating Groups................................................. 25
Competitive Advantages................................................. 31
Clients................................................................ 33
Competition............................................................ 34
Employees.............................................................. 34
Government Regulation.................................................. 35
Properties............................................................. 35
Legal Proceedings...................................................... 36
SELECTED FINANCIAL DATA.................................................. 37
UNAUDITED PRO FORMA FINANCIAL DATA....................................... 38
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS........................................................... 40
Overview............................................................... 40
Results of Operations.................................................. 40
Liquidity and Capital Resources........................................ 45
Effect of Inflation.................................................... 45
Quantitative and Qualitative Disclosures About Market Risk............. 45
</TABLE>

i
<PAGE>

<TABLE>
<CAPTION>
Item Page
- ---- ----
<S> <C>
MANAGEMENT............................................................... 46
Directors.............................................................. 46
Directors' Meetings and Committees..................................... 46
Compensation of Directors.............................................. 47
Executive Officers..................................................... 47
EXECUTIVE COMPENSATION................................................... 48
Historical Compensation................................................ 48
SHS Compensation and Benefit Plans..................................... 49
Treatment of Snyder Options and Other Benefits Following the
Distribution.......................................................... 51
Employment Agreements.................................................. 52
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT........... 54
DESCRIPTION OF CAPITAL STOCK............................................. 55
Authorized Capital Stock............................................... 55
SHS Common Stock....................................................... 55
Preferred Stock........................................................ 55
No Preemptive Rights................................................... 55
Transfer Agent and Registrar........................................... 55
PURPOSES AND EFFECTS OF CERTAIN PROVISIONS OF DELAWARE LAW, SHS'S
CERTIFICATE OF INCORPORATION AND BY-LAWS................................ 56
Delaware Law........................................................... 56
Certificate of Incorporation and By-Laws............................... 56
LIMITATION ON LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS.... 57
Limitation on Liability of Directors................................... 57
Indemnification and Insurance.......................................... 57
ADDITIONAL INFORMATION................................................... 58
INDEX TO FINANCIAL STATEMENTS............................................ F-1
</TABLE>

ii
<PAGE>

SUMMARY

This summary highlights selected information from this information statement,
but does not contain all details concerning the distribution of the SHS common
stock to Snyder stockholders, including information that may be important to
you. To better understand the distribution, and the business and financial
position of SHS, you should carefully review this entire document. References
in this information statement to "SHS" mean Snyder Healthcare Services, Inc.
and its subsidiaries. References in this information statement to "Snyder" mean
Snyder Communications, Inc. and its subsidiaries and affiliates.

Snyder Healthcare Services, Inc.

After the distribution, SHS will continue to be one of the leading providers
of marketing and sales services for the pharmaceutical and life sciences
industries. Our salesforce ranks first or second in size among outside
providers in four of the top five worldwide pharmaceutical markets. Our core
client base includes the 20 largest pharmaceutical companies. Our three
operating groups offer services which are designed to develop, establish and
monitor strategic marketing plans for pharmaceutical and other life sciences
products, conduct educational research and communications services for the
medical community and execute our clients' marketing strategies. Our Health
Products Research Group uses proprietary systems to analytically design and
monitor targeted marketing and sales programs. Our Healthcare Communications
Group provides services which create pharmaceutical product awareness and
demand within the medical community both prior and subsequent to a product's
launch. Our Contract Sales Group executes pharmaceutical product sales and
marketing programs through its salesforce.

As of the distribution date, the business conducted by Snyder's healthcare
services group will have been transferred to Snyder Healthcare Services, Inc.,
a newly formed Delaware corporation. The shares of common stock of SHS will be
distributed to Snyder stockholders on a pro rata basis.

The distribution of the shares of SHS common stock will be effective on the
distribution date, , 1999. Following the distribution, Snyder will
focus its efforts on its worldwide direct marketing, advertising,
communications and Internet professional services business.

Snyder's management believes that separating SHS into a separate,
strategically focused public company will provide the following benefits:

. Tie Compensation to Performance. Following the distribution, SHS will be
able to attract and retain key employees through the use of stock-based
incentives and more closely tie compensation incentives for its
employees to the performance of the healthcare marketing services
business. The primary component of the compensation packages for Eran
Broshy, the Chief Executive Officer of SHS, and the other members of
SHS's management team will be SHS common stock. We intend to establish
certain employee benefit plans for the benefit of SHS employees,
including a stock incentive plan and an employee stock purchase plan.
These equity incentives are expected to help SHS attract and retain
talented and effective management and to motivate employees throughout
the organization. In connection with the distribution, existing stock
option and other incentive awards to SHS's employees will be cancelled
and replaced with SHS common stock awards. SHS's ability to effectively
attract, retain and incentivize its management team and employees of the
healthcare marketing services business is a principal purpose of the
distribution.

. Develop Focused Business Strategies. Snyder's management believes that,
because of the unique characteristics of its healthcare marketing
services business, the business strategies of SHS need to be
distinguished from those pursued by Snyder in its core markets. As a
separate company, SHS will have more flexibility in responding to the
needs of its client base. This focus will enable SHS to compete more
effectively in the pharmaceutical and life sciences industries.

1
<PAGE>

. Improve Access to Capital. The distribution will give SHS direct access
to capital markets. As a group within Snyder, SHS competed with the
other operating businesses and groups within Snyder for management
attention, support resources and capital to finance expansion and growth
opportunities. As a separate company, with its own management and
structure, SHS will be better able to obtain the debt and equity funding
necessary to execute its business plans and strategies.

. Increase Visibility to the Capital Markets. Following the distribution,
the financial markets will be able to focus on the individual businesses
and strengths of SHS and Snyder and more accurately evaluate the
performance of each distinct business compared to companies in the same
or similar businesses.

After the distribution, Snyder will retain responsibility for liabilities and
obligations relating to its direct marketing, advertising, communications and
Internet professional services business, and for general corporate liabilities
that are not directly related to the healthcare services business.

Questions and Answers About SHS and the Distribution

What is SHS's Business? After the distribution, SHS will operate the
healthcare marketing services business currently
conducted by Snyder's healthcare services group.
SHS's marketing and sales services are provided to
clients in the life sciences industry in the U.S. and
Europe through its three units: the Health Products
Research Group, Healthcare Communications Group and
Contract Sales Group. These three units allow us to
provide integrated marketing services across the full
range of areas required for the successful sale of a
pharmaceutical or life sciences product.

Why is Snyder Snyder believes that separating its healthcare
separating the marketing services business into a strategically
healthcare services focused public company will allow SHS to more closely
business in a publicly tie compensation incentives for its employees to its
traded company? business' performance and allow SHS to implement
business strategies that are closely tailored to its
particular marketing services. As a separate company,
SHS is also expected to benefit from more focused
management attention and improved access to the
capital markets.

Who will be the Eran Broshy will be the Chief Executive Officer of
executive officers and SHS. Mr. Broshy has extensive experience in the
directors of SHS? pharmaceutical and life sciences industries, serving
as North American healthcare practice leader of the
Boston Consulting Group until 1998, and most recently
as President and Chief Executive Officer of Coelcanth
Corporation, a privately-held biotechnology company.
Mr. Broshy will be supported by a management team
that will include Robert Brown, Ph.D., R. Jeremy
Stone, M.D., Allan Avery and William C. Pollock. See
"Management--Executive Officers" beginning on page
47.

The SHS Board of Directors will consist of
persons, including both Daniel M. Snyder
and Michele D. Snyder, who will serve as non-
executive co-chairpersons of SHS, and Eran Broshy,
Fred Drasner, Mortimer Zuckerman and
additional independent directors that will be
designated prior to the distribution. See
"Management--Directors" beginning on page 46.

2
<PAGE>

After the distribution, After the distribution, Snyder will no longer own any
will SHS be related to SHS common stock. However, Snyder and SHS will enter
Snyder in any way? into certain agreements to define their ongoing
relationship after the distribution. These agreements
also allocate responsibility for obligations arising
prior to the distribution and for certain obligations
that might arise in the future. See "Relationship and
Agreements Between SHS and Snyder After the
Distribution" beginning on page 19.

What are the risks SHS's business is subject to risks that include,
involved in owning SHS among others, management of its rapid growth, risks
common stock? related to its international operations and
expansion, and its reliance on significant clients.
The separation of SHS from Snyder presents certain
additional risks because SHS has never operated
independently of Snyder; there is no existing market
for SHS common stock (although we are seeking to list
the SHS common stock on the Nasdaq National Market);
and a large number of the shares distributed could be
sold into the market at any given time. See "The
Distribution--Risk Factors" beginning on page 12 for
a more complete discussion of certain matters which
you should consider in respect of your ownership of
SHS common stock.

What do I have to do to Nothing. No proxy or vote is necessary for the
participate in the distribution. If you own Snyder common stock as of
distribution? the close of business on the record date,
, 1999, shares of SHS common stock will
be mailed to you or credited to your brokerage
account in , 1999. You do not need to mail
in Snyder stock certificates to receive the SHS
common stock certificates. You will not receive new
Snyder common stock certificates.

Explain the One share of SHS common stock will be distributed for
distribution ratio. every two shares of Snyder common stock you own on
the record date. For example, if you own 100 shares
of Snyder common stock as of the close of business on
the record date, you will receive 50 shares of SHS
common stock in the distribution. You will receive a
check for the cash equivalent of any fractional
shares you otherwise would have received in the
distribution.

Is the distribution The distribution is conditioned on Snyder receiving
taxable for United an opinion from Arthur Andersen LLP substantially to
States federal income the effect that the distribution should be tax-free
tax purposes? to Snyder and to Snyder's U.S. stockholders except
with respect to cash you are paid in lieu of
fractional shares of SHS common stock. See "The
Distribution--Risk Factors--Tax Consequences of the
Distribution" beginning on page 15 and "The
Distribution--Material Federal Income Tax
Consequences" beginning on page 16, for a more
complete discussion of the United States federal
income tax consequences of the distribution to
holders of Snyder common stock.

Will I be paid any SHS does not anticipate paying any cash dividends on
dividends on the SHS its common stock in the foreseeable future. See "The
common stock? Distribution--Dividend Policy" beginning on page 17.

Where will my shares of At present, there is no public market for SHS common
SHS common stock trade? stock. SHS is seeking to list its common stock on the
Nasdaq National Market. If the shares are accepted
for listing, we expect that a "when-issued" trading
market for SHS common stock will develop on or
shortly before the

3
<PAGE>

record date, and that "regular-way" trading will
begin on , 1999. See "The Distribution--
Market for SHS Common Stock" beginning on page 17.

Will the distribution After the distribution, the trading price of Snyder
affect the trading common stock may be lower than the trading price
price of my Snyder immediately prior to the distribution. Moreover,
common stock? until the market has evaluated the operations of
Snyder without the business of SHS, the trading price
of Snyder common stock may fluctuate. The combined
trading prices of Snyder common stock and SHS common
stock may not equal the trading price of Snyder
common stock prior to the distribution. See "The
Distribution--Market for SHS Common Stock" beginning
on page 17.

Will shares trade any Yes. A temporary form of interim trading called
differently as a result "when-issued" trading is likely to develop for SHS
of the distribution? common stock on or shortly before the record date and
to continue through the effective date of the
distribution, which is , 1999. A "when-
issued" listing can be identified by the letters "wi"
next to the SHS common stock on the Nasdaq National
Market. If "when-issued" trading develops, you may
buy or sell SHS common stock in advance of the
distribution date on a "when-issued" basis. During
this time, Snyder common stock will continue to trade
on a "regular-way" basis and may also trade on a
"when-issued" basis, reflecting an assumed post-
distribution value for Snyder common stock. Snyder
common stock "when-issued" trading, if available,
could begin on or shortly before the record date and
continue through the distribution date. If this
occurs, an additional listing for Snyder common
stock, followed by the letters "wi", will appear on
the New York Stock Exchange. "When-issued" trading
occurs in order to develop an orderly market and
trading price for SHS common stock (and possibly
Snyder common stock) after the distribution. There
may be differences between the combined value of
"when-issued" SHS common stock and Snyder common
stock as compared to the "regular-way" price of
Snyder common stock during this period. If Snyder
common stock "when-issued" trading is not available,
the New York Stock Exchange will require that shares
of Snyder common stock that are sold or purchased
from the period beginning on , 1999 and
ending on the distribution date be accompanied by due
bills representing the SHS common stock distributable
with respect to such shares, and that during such
period neither the Snyder common stock nor the due
bills may be purchased or sold separately.

What will happen to Both vested and unvested Snyder employee stock
existing employee stock options and other incentive awards held by employees
options to purchase of SHS will be cancelled and replaced with stock
Snyder common stock? options to purchase shares of common stock of SHS.
The replacement awards granted under the SHS stock
incentive plan will maintain the economic position of
the holders, will not increase the aggregate
intrinsic value of the options outstanding, and will
not change the ratio of the exercise price per option
to the market value per share. Snyder employee stock
options and other incentive awards held by employees
of Snyder will be retained by employees of Snyder and
their

4
<PAGE>

exercise prices will be adjusted in the same manner
to reflect the distribution. See "Executive
Compensation -- Treatment of Snyder Options and Other
Benefits Following the Distribution" beginning on
page 51.

Key Terms of the Distribution

No Stockholder Action No action is required by Snyder stockholders to
Required receive SHS common stock in the distribution.

You do not need to surrender Snyder common stock to
receive SHS common stock in the distribution.

The number of shares of Snyder common stock you own
will not change as a result of the distribution.

Record Date If you are a holder of Snyder common stock as of the
close of business on the record date ( ,
1999), you will be entitled to receive SHS common
stock in the distribution.

Distribution Ratio You will receive one share of SHS common stock for
every two shares of Snyder common stock you own as of
the close of business on , 1999.

No Fractional Shares Fractional shares will not be distributed. Instead,
Will Be Issued they will be aggregated and sold in the public market
by the distribution agent and the aggregate cash
proceeds will be distributed ratably to stockholders
otherwise entitled to fractional interests. See "The
Distribution--Manner of Effecting the Distribution"
beginning on page 11.

Shares To Be All of the SHS common stock will be distributed in
Distributed the distribution. Based on the shares of
Snyder common stock outstanding as of
, 1999, shares of SHS common
stock will be distributed.

Mailing Date The distribution agent will mail SHS common stock
certificates to Snyder stockholders on or about
, 1999, which you should receive
shortly thereafter.

5
<PAGE>

Information Regarding the Distribution and SHS

Before the distribution, you should direct inquiries relating to the
distribution to:

Snyder Communications, Inc.
Two Democracy Center
6903 Rockledge Drive
Bethesda, MD 20817
Attention: Investor Relations
(301) 468-1010

After the distribution, you should direct inquiries relating to an investment
in SHS common stock to:

Snyder Healthcare Services, Inc.
200 Cottontail Lane
Vantage Court North
Somerset, NJ 08873
Attention: Investor Relations
(732) 537-4800

After the distribution, the transfer agent and registrar for the SHS common
stock will be:

American Stock Transfer and Trust Company
Shareholder Division
40 Wall Street, 46th Floor
New York, NY 10005
(800) 937-5449

6
<PAGE>

Reasons for Furnishing This Information Statement

This information statement is being furnished by Snyder solely to provide
information to Snyder stockholders who will receive SHS common stock in the
distribution. It is not, and is not to be construed as, an inducement or
encouragement to buy or sell any securities of Snyder or SHS. Snyder and SHS
believe that the information presented herein is accurate as of the date
hereof. Changes will occur after the date hereof, and neither Snyder nor SHS
will update the information except to the extent required in the normal course
of their respective public disclosure practices.

Forward-Looking Statements

We believe that many of the statements included in this information
statement, including those under the captions:

. "Summary;"

. "The Distribution--Risk Factors;"

. "Management's Discussion and Analysis of Financial Condition and
Results of Operations;" and

. "Business;"

may be forward-looking statements. Forward-looking statements can be identified
by the use of forward-looking words, such as "may," "will," "project,"
"estimate," "anticipate," "believe," "expect," "continue," "potential,"
"opportunity," or the negative of those terms or other variations of those
terms or comparable words or expressions.

We note that a variety of the risks and uncertainties that we discuss in
detail under "The Distribution--Risk Factors" could cause our actual results
and experience to differ materially from those expected. Readers are cautioned
not to place undue reliance on forward-looking statements in this information
statement, which speak only as of the date of this information statement.

7
<PAGE>

Summary Historical Financial Data

The following table summarizes certain historical financial data with respect
to SHS and is qualified in its entirety by reference to, and should be read in
conjunction with, the SHS Historical Financial Statements and related notes
included elsewhere in this information statement. The historical financial data
for the years ended December 31, 1998, 1997 and 1996 have been derived from the
audited financial statements of SHS. Historical financial information may not
be indicative of SHS's future performance as an independent company. See also
"Selected Financial Data," "Unaudited Pro Forma Financial Data," "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
and "Business."

<TABLE>
<CAPTION>
For the Three Months For the Years Ended
Ended March 31, December 31,
--------------------- ----------------------------
1999 1998 1998 1997 1996
---------- ---------- -------- --------- --------
(unaudited)
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Statement of Income Data:
Revenues................ $ 86,939 $ 67,356 $321,500 $ 208,967 $144,704
========== ========== ======== ========= ========
Net income (loss)....... $ 5,089 $ (4,052) $ 1,446 $ (8,718) $ 83
========== ========== ======== ========= ========
Unaudited:
Pro forma historical
basic and diluted net
income (loss) per
share (4).............. $ 0.13 $ (0.11) $ 0.04 $ (0.23) $ --
========== ========== ======== ========= ========
Pro forma adjusted net
income
(loss) (1)............. $ 5,089 $ (4,052) $ 1,446 $ (10,700) $ (2,729)
========== ========== ======== ========= ========
Pro forma adjusted basic
and diluted net income
(loss) per
share (1)(4)........... $ 0.13 $ (0.11) $ 0.04 $ (0.28) $ (0.07)
========== ========== ======== ========= ========
Pro forma adjusted net
income
excluding nonrecurring
items(2)............... $ 6,305 $ 5,642 $ 24,739 $ 9,622 $ 7,393
========== ========== ======== ========= ========
Pro forma adjusted basic
and diluted net income
excluding nonrecurring
items per share (2)(4). $ 0.17 $ 0.15 $ 0.65 $ 0.25 $ 0.20
========== ========== ======== ========= ========
Shares used in computing
net income (loss) per
share (4).............. 37,790 37,790 37,790 37,790 37,790
========== ========== ======== ========= ========
Balance Sheet Data:
Total assets............ $224,251 $193,644 $ 100,947 $ 51,180
========== ======== ========= ========
Long-term debt.......... $ 1,336 $ 1,473 $ 4,154 $ 2,634
========== ======== ========= ========
Total investments and
advances from Snyder
Communications, Inc.(3)
....................... $145,805 $119,727 $ 10,371 $ 4,697
========== ======== ========= ========
</TABLE>
- --------
(1) Prior to their respective acquisitions, certain U.S.-based acquirees were
not subject to federal or state income taxes. Pro forma adjusted net income
represents historical net income adjusted to reflect a provision for income
taxes as if SHS had been taxed similarly to a C corporation for all periods
presented.
(2) Pro forma adjusted net income, excluding nonrecurring items represents
historical net income adjusted to reflect a provision for income taxes as
if SHS had been taxed similarly to a C corporation for all periods
presented and the elimination of compensation to stockholders,
recapitalization costs and acquisition and related costs. Compensation to
stockholders, recapitalization costs and acquisition costs are considered
to be nonrecurring by SHS because SHS's current operations will not result
in any compensation to stockholders, recapitalization costs or acquisition
costs in future periods.
(3) Investments and advances from Snyder represent the net cash transferred to
SHS from Snyder and businesses acquired by Snyder and contributed to SHS.
No amounts are expected to be repaid to Snyder.
(4) For all periods presented, net income per share has been computed using
shares of SHS that will be issued upon the distribution based on the number
of outstanding shares of Snyder common stock on June 22, 1999. Basic and
diluted net income per share are the same for all periods presented, as
there will be no options to purchase SHS common stock granted until the
distribution.

8
<PAGE>

Summary Unaudited Pro Forma Financial Data

The following unaudited pro forma financial data reflect the distribution as
of the beginning of each of the periods presented for pro forma income
statement data purposes. No pro forma balance sheet is presented, as there were
no pro forma adjustments to the historical balance sheet. The unaudited pro
forma data reflect the estimated changes in corporate overhead as if SHS
operated as an independent entity, SHS's effective income tax rate subsequent
to the distribution and the effects of significant acquisitions as if they had
been consummated at the beginning of each of the periods presented. These data
do not necessarily reflect the results of operations or financial position of
SHS that would have resulted had the distribution actually been consummated as
of such dates. Also these data are not indicative of the future results of
operations or future financial position of SHS.

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME (LOSS)
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(in thousands)
<TABLE>
<CAPTION>
Healthcare Pro Forma Pro Forma
Historical Entries Healthcare
---------- --------- ----------
<S> <C> <C> <C>
Net revenues............................. $86,939 $ -- $86,939
Operating expenses:
Cost of services..................... 66,856 -- 66,856
Selling, general, and administrative
expenses............................ 10,346 1,871 (1)(4) 12,217
Compensation to stockholders......... -- -- --
Acquisition and related costs........ 1,576 -- 1,576
------- ------- -------
Income from operations................... 8,161 (1,871) 6,290
Interest expense......................... (41) -- (41)
Investment income........................ 278 -- 278
------- ------- -------
Income before income taxes............... 8,398 (1,871) 6,527
Income tax (provision) benefit........... (3,309) 716 (2) (2,593)
------- ------- -------
Net income............................... $ 5,089 $(1,155) $ 3,934
======= ======= =======
</TABLE>

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 1998
(in thousands)
<TABLE>
<CAPTION>
Purchased Pro
Healthcare Subsidiaries Forma Pro Forma
Historical Historical (3) Entries Healthcare
---------- -------------- ------- ----------
<S> <C> <C> <C> <C>
Net revenues............... $321,500 $10,505 $ -- $332,005
Operating expenses:
Cost of services....... 236,047 8,029 -- 244,076
Selling, general, and
administrative
expenses.............. 43,029 1,820 8,991 (1)(4) 53,840
Compensation to
stockholders.......... 742 -- -- 742
Acquisition and related
costs................. 26,922 -- -- 26,922
-------- ------- ------- --------
Income from operations..... 14,760 656 (8,991) 6,425
Interest expense........... (2,315) (1) -- (2,316)
Investment income.......... 1,850 2 -- 1,852
-------- ------- ------- --------
Income (loss) before income
taxes..................... 14,295 657 (8,991) 5,961
Income tax (provision)
benefit................... (12,849) (412) 3,479 (2) (9,782)
-------- ------- ------- --------
Net income (loss).......... $ 1,446 $ 245 $(5,512) $ (3,821)
======== ======= ======= ========
</TABLE>

9
<PAGE>

- --------
(1) Reflects the estimated additional costs associated with operating as a
stand-alone public company, including additional finance and
administrative employees, professional services, office rent, advertising
and other general and administrative expenses. There can be no assurance
that actual costs will not exceed these estimates.
(2) Reflects the effect of the estimated increase in SHS's effective tax rate
subsequent to the date of the distribution, net of the tax effect of the
estimated incremental costs associated with operating as a stand-alone
public company. See footnote (1) above.
(3) Reflects the historical results of operations of Healthcare Promotions,
LLC and CLI Pharma S.A. from January 1, 1998 through their respective
dates of acquisition.
(4) Reflects compensation expense of $2.4 million and $0.2 million for the
year ended December 31, 1998 and the three months ended March 31, 1999,
respectively, associated with restricted stock grants to be made to
certain officers and directors of SHS on the distribution date.

10
<PAGE>

THE DISTRIBUTION

Background and Reasons for the Distribution

Snyder is one of the largest worldwide providers of direct marketing,
advertising and communications services, including services provided to
developers and producers of pharmaceutical and life-science products. In June
1999, Snyder determined that a separation of its healthcare marketing services
business into a separate company would allow it to more effectively attract and
retain key employees for its healthcare services business, focus on its direct
marketing, advertising, communications and Internet professional services
business in its core product markets, and provide its healthcare marketing
service business a better platform to compete in the pharmaceutical and life
sciences markets.

Snyder's management believes that separating Snyder and SHS into two
separate, strategically focused public companies will provide the following
benefits:

. Tie Compensation to Performance. Following the distribution, SHS will be
able to attract and retain key employees through the use of stock-based
incentives and more closely tie compensation incentives for its
employees to the performance of the healthcare marketing services
business. The primary component of the compensation packages for Eran
Broshy, the Chief Executive Officer of SHS, and the other members of
SHS's management team will be SHS common stock. SHS intends to establish
certain employee benefit plans for the benefit of SHS employees,
including a stock incentive plan and an employee stock purchase plan.
These equity incentives are expected to help SHS attract and retain
talented and effective management and to motivate employees throughout
the organization. In connection with the distribution, existing stock
options and other incentive awards to SHS's employees will be cancelled
and replaced with SHS common stock awards. SHS's ability to effectively
attract, retain and incentivize its management team and employees of the
healthcare marketing services business is a principal purpose of the
distribution.

. Increase Visibility to the Capital Markets. Following the distribution,
the financial markets will be able to focus on the individual businesses
and strengths of SHS and Snyder, and more accurately evaluate the
performance of each distinct business compared to companies in the same
or similar businesses.

Manner of Effecting the Distribution

The general terms and conditions relating to the distribution are set forth
in a Distribution Agreement between Snyder and SHS. See "Relationship and
Agreements Between Snyder and SHS After the Distribution-- Distribution
Agreement."

On the distribution date, Snyder will effect the distribution by delivering
all of the outstanding shares of SHS common stock to American Stock Transfer
and Trust Company, as distribution agent, for distribution to the

11
<PAGE>

holders of record of Snyder common stock at the close of business on the record
date. The distribution will be made on the basis of one share of SHS common
stock for every two shares of Snyder common stock. The actual number of shares
of SHS common stock that will be distributed will depend on the number of
shares of Snyder common stock outstanding on the record date. The shares of SHS
common stock will be fully paid and nonassessable, and the holders of such
shares will not be entitled to preemptive rights. See "Description of Capital
Stock." It is expected that certificates representing shares of SHS common
stock will be mailed to Snyder stockholders on or about , 1999.

Certificates or script representing fractional shares of SHS common stock
will not be issued to Snyder stockholders as part of the distribution. Instead,
each holder of Snyder common stock who would otherwise be entitled to receive a
fractional share will receive cash for such fractional interests. The
distribution agent will, as soon as practicable after the distribution date,
aggregate and sell all such fractional interests on the Nasdaq National Market
at then prevailing market prices and distribute the aggregate proceeds ratably
to Snyder stockholders otherwise entitled to such fractional interests. Snyder
will pay all brokers' fees and commissions in respect of such sale. See "--
Material Federal Income Tax Consequences" for a discussion of the United States
federal income tax treatment of proceeds from fractional share interests.

Risk Factors

You should carefully consider the following risk factors to which SHS has
been subject in the past, and which currently and in the future may have an
impact on SHS. The following risk factors are cautionary statements identifying
important factors that could cause actual results to differ materially from
those contained in this information statement.

Dependence on Certain Industries and Clients

Our revenues are highly dependent on research and development expenditures by
companies in the life sciences industries. Promotional, marketing and sales
expenditures by pharmaceutical manufacturers have in the past been, and could
in the future be, negatively impacted by, among other things, governmental
reform or private market initiatives intended to reduce the cost of
pharmaceutical products or by governmental, medical association or
pharmaceutical industry initiatives designed to regulate the manner in which
pharmaceutical manufacturers promote their products. Furthermore, the trend in
the pharmaceutical and life sciences industry toward consolidation, by merger
or otherwise, may result in a reduction in the use of contract sales providers.

Dependence on Trend Toward Outsourcing

Our business and growth depend in large part on the trend in the
pharmaceutical and life sciences industries toward outsourcing of marketing
services. We can give no assurance that this trend in outsourcing will
continue, as companies may elect to perform such services internally. A
significant change in the direction of this trend generally, or a trend in the
pharmaceutical or life sciences industries, not to use, or to reduce the use
of, outsourcing marketing services, such as those that we provide, would have a
material adverse effect on our business.

Reliance on Significant Clients

Our ten largest clients, based on revenues for the three months ended March
31, 1999, listed alphabetically, are Abbott Laboratories, AstraZeneca, Bristol-
Myers Squibb, Eli Lilly, Endo Pharmaceuticals, Johnson & Johnson, Merck,
Novartis, Pfizer and Searle (Monsanto). These clients accounted for
approximately 59% of our revenues for the three months ended March 31, 1999,
with no single client accounting for more than 10% of our revenues for such
period. We provide services to many of our most significant clients under
multi-year contracts. As is typical in the industry, clients may cancel our
multi-year contracts on specified notice periods. As a result, we cannot assure
you that our most significant clients will continue to do business with us over
the long term. If any of our significant clients elect not to renew their
contracts, it could have material adverse effect on our results of operations.

12
<PAGE>

Risk Associated with International Operations and Expansion

SHS has a number of operations in the United Kingdom and continental Europe.
There are certain risks inherent in conducting international business,
including (but not limited to) the following:

. difficulties in complying with a variety of foreign laws,
. unexpected changes in regulatory requirements,
. difficulties in staffing and managing foreign operations, and
. potentially adverse tax consequences.

We cannot assure you that one or more of these factors will not have a
material adverse effect on our international operations and consequently on our
business, financial condition and results of operations.

Also, approximately 45% of our revenues in 1998 were generated from
operations outside of the United States. The majority of these non-U.S.
revenues were denominated in British pounds and French francs. The U.S. dollar
value of our revenues varies with currency exchange rate fluctuations.
Significant increases in the value of the U.S. dollar relative to the British
pound or French franc could have a material adverse effect on our results of
operations. We continually evaluate our exposure to exchange rate risk but do
not currently hedge this risk.

Integration of Operations

SHS contains a number of complementary businesses that were acquired by
Snyder over the past several years. Most of these acquired businesses have been
integrated into our overall operations, although in some cases we have not
completed this integration process. We cannot assure you that we will achieve
the anticipated benefits with respect to the integration of these businesses.
We cannot give any assurance that we will be able to manage successfully our
new service areas, the employees of such service areas or the client bases
supported by such service areas. If we are unable to integrate these businesses
successfully, this could have a material adverse effect on our business,
financial condition and results of operations.

Management of Growth

SHS has grown rapidly over the past several years. Our continued growth
depends to a significant degree on our ability to successfully utilize our
existing infrastructure to perform services for new clients, as well as on our
ability to develop and successfully implement new marketing methods or channels
for new services. Our continued growth will also depend on a number of other
factors, including our ability to maintain the high quality of the services we
provide to our customers and to increase our penetration with existing
customers; to recruit, motivate and retain qualified personnel; and to
economically train existing sales representatives and recruit new sales
representatives. Our continued growth will also require us to implement
enhanced operational and financial systems and additional management resources.
We cannot assure you that we will be able to manage our expanding operations
effectively or that we will be able to maintain our growth. If we are unable to
manage growth effectively, this could materially adversely affect our business,
financial condition and results of operations.

Dependence on Labor Force

Many aspects of our business are very labor intensive. A higher turnover rate
among our employees would increase our recruiting and training costs and
decrease operating efficiencies and productivity. Our operations typically
require specially trained persons, such as those employees in the
pharmaceutical detailing business. Growth in our business will require us to
recruit and train qualified personnel at an accelerated rate from time to time.
The labor markets for quality personnel are competitive, and we cannot assure
you that we will be able to continue to hire, train and retain a sufficient
labor force of qualified persons.

Reliance on Technology; Risk of Business Interruption

We have invested significantly in sophisticated and specialized computer
technology and have focused on the application of this technology to provide
customized solutions to meet many of our clients' needs. We have

13
<PAGE>

also invested significantly in sophisticated end-user databases and software
that enable us to market our clients' products to targeted markets. We
anticipate that it will be necessary to continue to select, invest in and
develop new and enhanced technology and end-user databases on a timely basis in
the future in order to maintain our competitiveness. In addition, our business
is dependent on our computer equipment and software systems, and the temporary
or permanent loss of these equipment or systems, through casualty or operating
malfunction, could have a material adverse effect on our business. Our property
and business interruption insurance may not adequately compensate us for all
losses that we may incur in any such event.

Government Regulation

In connection with the handling and distribution of samples of pharmaceutical
products, we are subject to regulation by the prescription Drug Marketing Act
of 1987 and other applicable federal, state and local laws and regulations in
the United States and certain regulations in the United Kingdom, France,
Germany and the European Union. Pharmaceutical manufacturers and the health
care industry in general are subject to significant U.S. federal and state,
U.K., French, German and European Union regulation. In particular, regulations
affecting the pricing or marketing of pharmaceuticals could make it
uneconomical or infeasible for pharmaceutical companies to market their
products through medical marketing detailers. Other changes in the domestic and
international regulation of the pharmaceutical industry could also have a
material adverse effect on SHS.

Our physician education services are also subject to a variety of federal and
state regulations relating to both the education of medical professionals and
sales of pharmaceuticals. Any changes in these regulations or their application
could have a material adverse effect on our business.

Influence of Principal Stockholders

Immediately after the distribution, Daniel M. Snyder and Michele D. Snyder,
the non-executive co-chairpersons of our Board of Directors, will beneficially
own approximately 12.4% and 4.4%, respectively, of the outstanding shares of
SHS common stock. As a result, each individually, and both Mr. Snyder and Ms.
Snyder, if they act in concert, will be able to exercise substantial influence
over our business through their voting power with respect to the election of
directors and all other matters requiring action by stockholders. This
concentration of share ownership may have the effect of discouraging, delaying
or preventing a change in control of SHS.

Year 2000

Euro Conversion

On January 1, 1999, eleven member countries of the European Union established
fixed conversion rates between their existing currencies and one common
currency, the Euro. Given the extent of the services we currently provide in
continental Europe and the nature of those services, we currently do not expect
the introduction of the Euro to have a material impact on our operations or
cash flows. However, uncertainties exist as to the effects the Euro may have on
our European clients, as well as the impact of the Euro conversion on the
economies of the participating countries.

14
<PAGE>

Our operations affected by the Euro currency conversion have established
plans to address the systems and business issues raised by the Euro currency
conversion. These issues include:

. the need to adapt computer and other business systems and equipment to
accommodate Euro-denominated transactions; and

. the competitive impact of cross-border price transparency which may make
it more difficult for a business to charge different prices for the same
products on a country-by-country basis, particularly once the Euro
currency begins circulation in 2002.

We will continue to evaluate the impact of the introduction of the Euro as we
continue to expand our services and the European locations in which we operate.

Lack of Operating History as an Independent Company

SHS has no operating history as an independent, publicly traded company and
has historically relied on Snyder for various financial, administrative and
managerial expertise relevant to the conduct of its business. After the
distribution, we will maintain our own banking relationships, employ our own
senior executives and perform our own administrative functions (except that
Snyder will continue to provide certain support services to SHS on a
contractual basis). Although the healthcare services business has been
profitable as part of Snyder, there can be no assurance that, as a stand-alone
company, SHS's future results will be comparable to reported historical
consolidated results before the distribution. See "Unaudited Pro Forma
Financial Data" and "Relationship and Agreements Between Snyder and SHS After
the Distribution."

Tax Consequences of the Distribution

The distribution is conditioned upon receipt of an opinion of Arthur Andersen
LLP that the distribution should be a tax-free spin-off to Snyder and to
Snyder's U.S. stockholders. No ruling has been requested from the Internal
Revenue Service as to the tax consequences of the distribution. The opinion of
Arthur Andersen LLP is not binding on the Internal Revenue Service or the
courts. If the distribution does not qualify as a tax-free distribution, Snyder
would recognize gain equal to the excess of the fair market value of the SHS
common stock distributed to its stockholders over Snyder's basis in the SHS
common stock, and each U.S. stockholder of Snyder common stock would be
generally treated as if such stockholder had received a taxable dividend in an
amount equal to the fair market value of the SHS common stock received. See "--
Material Federal Income Tax Consequences."

Absence of Trading History for the Common Stock

There is no existing market for the SHS common stock. Although SHS is seeking
to list its common stock on the Nasdaq National Market, there can be no
assurance as to the trading prices for the security before or after the
distribution date. Until the SHS common stock is fully distributed and orderly
markets develop, the trading prices for such securities may fluctuate. Prices
for the SHS common stock will be determined in the trading markets and may be
influenced by many factors, including the depth and liquidity of the market for
such securities, investor perceptions of SHS and its business, the results of
SHS, the dividend policies of SHS and general economic and market conditions.
The SHS common stock distributed to Snyder stockholders in the distribution
generally will be freely transferable under the Securities Act of 1933, as
amended (the "Securities Act"), and the sale of a substantial number of shares
of SHS common stock after the distribution could adversely affect the market
price of SHS common stock. See "--Market for SHS Common Stock."

Absence of Dividends

We do not anticipate paying cash dividends in the foreseeable future. See "--
Dividend Policy."

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Material Federal Income Tax Consequences

The distribution is conditioned upon receipt by Snyder of an opinion from
Arthur Andersen LLP substantially to the effect that, among other things, the
distribution should qualify as a tax-free spin-off to Snyder and to Snyder's
U.S. stockholders under Section 355 of the Internal Revenue Code of 1986, as
amended (the "Code"). No rulings have been requested from the Internal Revenue
Service with respect to these matters and the opinion of Arthur Andersen LLP is
not binding on the Internal Revenue Service or the courts. Additionally, the
opinion of Arthur Andersen LLP is based on various representations and
assumptions described therein.

The opinion is based on current provisions of the Code, existing regulations
thereunder and current administrative rulings and court decisions, all of which
are subject to change. No attempt has been made to comment on all federal
income tax consequences of the distribution that may be relevant to particular
holders, including holders that are subject to special tax rules such as
dealers in securities, foreign persons, mutual funds, insurance companies, tax-
exempt entities, stockholders who acquire their SHS common stock pursuant to
the exercise of employee stock options or otherwise as compensation and holders
who do not hold their Snyder common stock as capital assets. Holders of Snyder
common stock are advised to consult their own tax advisors regarding the
federal income tax consequences of the distribution in light of their personal
circumstances and the consequences under applicable state, local and foreign
tax laws.

In the opinion of Arthur Andersen LLP the distribution should qualify as a
tax-free distribution under Section 355 of the Code. Accordingly:

(i) A Snyder stockholder should not recognize any income, gain or loss as a
result of the distribution, except, as described below, in connection
with fractional share proceeds from the deemed receipt and sale of any
SHS common stock;

(ii) A Snyder stockholder's aggregate tax basis for his or her Snyder
common stock on which SHS common stock is distributed and the SHS
common stock received by such stockholder in the distribution
(including any fractional shares of SHS common stock to which such
stockholder may be entitled) should be the same as the basis of Snyder
common stock held by such stockholder immediately prior to the
distribution. A Snyder stockholder's aggregate tax basis should be
allocated between his or her Snyder common stock and SHS common stock
received in the distribution (including any fractional shares of SHS
common stock deemed received) in proportion to the fair market value
of both the Snyder common stock and SHS common stock on the
distribution date;

(iii) A Snyder stockholder's holding period for the SHS common stock
received in the distribution (including any fractional shares of SHS
common stock to which such stockholder may be entitled) should
include the holding period of the Snyder common stock on which the
distribution is made, provided that such Snyder common stock is held
as a capital asset by such stockholder on the distribution date;

(iv) A Snyder stockholder who receives fractional share proceeds as a
result of the sale of shares of SHS common stock by the distribution
agent will be treated as if such fractional share had been received by
the stockholder as part of the distribution and then sold by such
stockholder. Accordingly, such stockholder should recognize gain or
loss equal to the difference between the cash so received and the
portion of the tax basis in SHS common stock that is allocable to such
fractional share. Such gain or loss should be capital gain or loss,
provided that such fractional share was held by such stockholder as a
capital asset at the time of the distribution; and

(v) Snyder should not recognize any gain or loss on the distribution.

Arthur Andersen LLP has advised Snyder that if the distribution does not
qualify as a tax-free spin-off pursuant to Section 355 of the Code, Snyder
would be required to recognize gain equal to the excess of the fair market
value of the SHS common stock distributed to its stockholders over Snyder's
basis in the SHS common

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stock. Snyder has agreed to indemnify SHS for any tax liability imposed on SHS
or any of its subsidiaries as a result of the distribution being determined to
be a taxable transaction other than due to any act or failure to act of SHS or
any of its subsidiaries. In addition, based on the advice of Arthur Andersen
LLP, if the distribution fails to qualify as a tax-free spin-off under Section
355 of the Code, each Snyder stockholder would be generally treated as if such
stockholder had received a taxable dividend in an amount equal to the fair
market value of the SHS common stock received.

Current United States Treasury regulations require each Snyder stockholder
who receives SHS common stock pursuant to the distribution to attach to his or
her federal income tax return for the year in which the distribution occurs a
detailed statement setting forth such data as may be appropriate in order to
show the applicability of Section 355 of the Code to the distribution. Snyder
will provide the appropriate information to each stockholder of record as of
the record date ( , 1999).

Under the Code, a holder of Snyder common stock may be subject, under certain
circumstances, to backup withholding at a rate of 31% with respect to the
amount of cash, if any, received as a result of the sale of fractional share
interests unless such holder provides proof of an applicable exemption or
correct taxpayer identification number, and otherwise complies with applicable
requirements of the backup withholding rules. Any amounts withheld under the
backup withholding rules are not additional tax and may be refunded or credited
against the holder's federal income tax liability, provided the required
information is furnished to the Internal Revenue Service.

Market for SHS Common Stock

There is no existing market for SHS common stock. SHS is seeking to list its
common stock on the Nasdaq National Market. If the shares are accepted for
listing, a "when-issued" trading market for SHS common stock is expected to
develop on or shortly before the record date. The term "when-issued" means that
shares can be traded prior to the time certificates are actually available or
issued. There can be no assurance about the trading prices for SHS common stock
before or after the distribution date, and until the common stock is fully
distributed and an orderly market develops, the trading prices for these
securities may fluctuate. Prices for SHS common stock will be determined in the
trading markets and may be influenced by many factors, including the depth and
liquidity of the market for such securities, developments generally affecting
SHS's business, the impact of the factors referred to in "Risk Factors,"
investor perceptions of SHS and its business, the results of SHS, the dividend
policy of SHS, and general economic and market conditions. It is anticipated
that SHS common stock will be traded on the Nasdaq National Market under the
symbol " ."

The transfer agent and registrar for the SHS common stock will be American
Stock Transfer and Trust Company.

Shares of SHS common stock distributed to Snyder stockholders in the
distribution will be freely transferable under the Securities Act, except for
shares of SHS common stock received by persons who may be deemed to be
affiliates of SHS. Persons who may be deemed to be affiliates of SHS after the
distribution generally include individuals or entities that control, are
controlled by, or are under common control with SHS and may include certain
officers and directors, or principal stockholders, of SHS. After SHS becomes a
publicly traded company, securities held by persons who are its affiliates will
be subject to resale restrictions under the Securities Act. Affiliates of SHS
will be permitted to sell shares of the entity of which such persons are
affiliates only pursuant to an effective registration statement or an exemption
from the registration requirements of the Securities Act, such as the exemption
afforded by Rule 144 under the Securities Act.

Dividend Policy

SHS currently intends to retain its earnings for use in the operation of its
business and therefore does not anticipate declaring or paying any cash
dividends in the foreseeable future. Any future determination to declare

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or pay cash dividends will be made by SHS's Board of Directors. The actual
amount and timing of dividends, if any, will depend on SHS's financial
condition, results of operations, business prospects, capital requirements and
such other matters as SHS's Board of Directors may deem relevant. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

Distribution Conditions and Termination

It is expected that the distribution will be effective on the distribution
date, , 1999, provided that, among other things:

1. the Registration Statement on Form 10 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), filed by SHS shall have been
declared effective and no stop order relating to the registration
statement shall be in effect;

2. all necessary permits, registrations and consents required under the
securities or blue sky laws of states or other political subdivisions of
the United States in connection with the distribution shall have been
received or become effective;

3. the tax opinion from Arthur Andersen LLP shall have been received and
shall not have been revoked or modified in any material respect;

4. the SHS common stock shall have been approved for listing on the Nasdaq
National Market, subject to official notice of issuance;

5. the transfers of assets and liabilities to SHS required to constitute
SHS as described herein shall have been completed; and

6. no order, injunction or decree issued by any court of competent
jurisdiction or other legal restraint or prohibition preventing
consummation of the distribution or any of the transactions related
thereto (including the transfers of assets and liabilities contemplated
by the Distribution Agreement) shall be in effect.

The fulfillment or waiver of the foregoing conditions shall not create any
obligation on the part of Snyder to effect the distribution, and Snyder's Board
of Directors has reserved the right to amend, modify or abandon the
distribution and the related transactions at any time prior to the distribution
date.

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RELATIONSHIP AND AGREEMENTS BETWEEN SHS
AND SNYDER AFTER THE DISTRIBUTION

General

Immediately prior to the distribution, SHS will be wholly owned by Snyder
and, until the distribution, the results of operations of the assets and
entities that will constitute SHS will be included in Snyder's consolidated
financial statements. After the distribution, Snyder will not have any
ownership interest in SHS, which will be an independent, publicly traded
company. See "Security Ownership of Certain Beneficial Owners and Management."
After the distribution, SHS will not have any ownership interest in Snyder.

Immediately prior to the distribution, Snyder and SHS will enter into certain
agreements to define their ongoing relationship after the distribution and to
allocate tax, employee benefits and certain other liabilities and obligations
arising from periods prior to the distribution date. These agreements are
summarized below and have been filed as exhibits to the registration statement.
The following descriptions include a summary of the material terms of these
agreements but do not purport to be complete and are qualified in their
entirety by reference to the filed agreements.

Distribution Agreement

Snyder and SHS will enter into a Distribution Agreement which will provide
for, among other things, certain corporate transactions required to effect the
distribution and other arrangements among Snyder and SHS subsequent to the
distribution. The Distribution Agreement also sets forth the conditions to the
distribution. See "The Distribution--Distribution Conditions and Termination."

Transfers of Assets to SHS

The Distribution Agreement provides that Snyder will transfer or cause to be
transferred all of its right, title and interest in the assets constituting its
healthcare services business to SHS. The Distribution Agreement further
provides that SHS will take such action, if any, as may be necessary to
transfer assets owned by us so that, upon completion of all asset transfers by
Snyder and SHS, the assets constituting the healthcare services business are
owned by SHS and the assets constituting the remaining businesses of Snyder are
owned by Snyder.

Each party to the Distribution Agreement agrees to exercise its reasonable
efforts to obtain promptly any necessary consents and approvals and to take
such actions as may be reasonably necessary or desirable to carry out the
purposes of the Distribution Agreement and the other agreements summarized
below. In the event that any transfers contemplated by the Distribution
Agreement are not effected on or prior to the distribution date, the parties
agree to cooperate to effect such transfers as promptly as practicable
following the distribution date, and pending any such transfers, to hold any
asset not so transferred in trust for the use and benefit of the party entitled
thereto (at the expense of the party entitled thereto), and to retain any
liability not so transferred for the account of the party by whom such
liability is to be assumed. All assets are being transferred without any
representation or warranty, on an "as is-where is" basis and the relevant
transferee bears the risk that any necessary consent to transfer is not
obtained.

Allocation of Financial Responsibility

The Distribution Agreement provides for, among other things, assumptions of
liabilities and cross-indemnities designed to allocate generally, effective as
of the distribution date, financial responsibility for the liabilities arising
out of or in connection with:

. the assets and entities that will constitute SHS and its subsidiaries
(including liabilities arising in respect of the transfer of such assets
and entities to SHS), as well as the registration statement, to SHS; and

. the assets and entities that will constitute Snyder and its subsidiaries
to Snyder.

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Tax Sharing Agreement

Snyder and SHS will enter into a tax sharing agreement, which will allocate
tax liabilities between Snyder and SHS and address certain other tax matters
such as responsibility for filing tax returns and the conduct of audits and
other tax proceedings for taxable periods before and after the distribution
date. Generally, Snyder will be responsible for and will indemnify SHS against
all tax liabilities relating to the assets and entities that will constitute
Snyder and its subsidiaries, and SHS will be responsible for and will indemnify
Snyder against all tax liabilities relating to the assets and entities that
will constitute SHS and its subsidiaries.

In addition, SHS and Snyder will indemnify the other against all tax
liabilities incurred by Snyder or any of its subsidiaries, on the one hand, or
SHS or any of its subsidiaries, on the other hand, in connection with the
distribution, as a result of any act or failure to act of the other, including,
without limitation, any act or failure to act that results in a breach of any
representation made to Arthur Andersen LLP in connection with its opinion.
Furthermore, Snyder will be liable for and will indemnify SHS against all tax
liabilities imposed on SHS (or its subsidiaries) as a result of the
distribution being determined to be a taxable transaction other than due to an
act or failure to act of SHS or any of its subsidiaries.

Transitional Services Agreement

Snyder will enter into a Transitional Services Agreement with SHS. Pursuant
to this agreement, Snyder will continue to furnish various administrative
services to SHS. These services will include support in various aspects of
financial and tax processing and reporting for employees of SHS. This agreement
will terminate on December 31, 2001, but may be terminated by either party as
to specific services before December 31, 2001. SHS will pay fees to Snyder for
services provided in amounts based on Snyder's costs incurred in providing such
services.

Employee Benefits Agreement

Snyder and SHS will enter into an Employee Benefits Agreement, which
allocates responsibilities for employee compensation, benefits, labor, benefit
plan administration and certain other employment matters on and after the
distribution date.

We will assume our responsibility as employer in respect of our employees
from and after the distribution date. We will also retain liabilities in
respect of former employees associated with the facilities and operations of
SHS who terminated employment on or prior to the distribution date. Benefit
plans established by SHS generally will recognize past service with Snyder.

Other Agreements

SHS will enter into agreements with Snyder to participate, along with Snyder,
in a group purchasing organization which will make certain national supply
contracts available to their respective facilities.

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BUSINESS

Overview

SHS is a leading global provider of marketing services for the life sciences
industry. Our clients include leading pharmaceutical, biotechnology, medical
device, and diagnostics companies. We offer a broad range of integrated
services, including educational programs which target leading physicians,
specially-designed strategic marketing plans and product sales programs which
are executed through our extensive sales network.

Our organization and service offerings reflect the changing needs of our
clients as their new products move through the development and regulatory
approval process. As a potential drug or device advances in the clinical trial
process towards commercialization, our clients must first educate medical
decision makers through a variety of informational media. These pharmaceutical
and life sciences companies subsequently need to design a focused launch
campaign to maximize product profitability upon regulatory approval of their
product. Prescription products are typically sold through product detailing,
which involves one-on-one meetings between a sales representative and a
targeted prescriber. Pharmaceutical manufacturers in particular rely on this
sales process as the most effective means of influencing prescription-writing
patterns, although these companies increasingly supplement their marketing
programs with direct-to-consumer advertising. In the past, product detailing
was handled by the pharmaceutical manufacturers themselves. However, the recent
focus among our clients on flexibility in cost management has lead to an
increased frequency of this work being outsourced to contract providers.

The trend among SHS's clients to outsource marketing and sales functions to
the healthcare marketing services industry began during the 1980s in the United
Kingdom. This was the result of significant regulatory and cost containment
pressures which ultimately led pharmaceutical manufacturers to search for more
effective methods of promoting new and existing products. By outsourcing
portions of their marketing and sales activities, pharmaceutical manufacturers
were able to shift from internally generated fixed costs to outsourced variable
costs. This trend has since spread to all segments of the life sciences
industry. A further benefit of using outside organizations for these marketing
activities is that it allows life sciences companies to refocus resources on
their core competency: discovering and developing new products. Since the early
1990s, outsourcing has gained significant momentum among U.S. pharmaceutical
manufacturers and other life sciences companies. The specific support services
purchased by these companies have since expanded beyond product detailing to
include every facet of the marketing and sales process. Over time, the leading
healthcare marketing service providers have offered a wider range of value-
added services to their clients, although most have retained a specific focus.
We believe that no other healthcare service provider offers the scope of
integrated marketing services which we provide.

We estimate that the market for healthcare marketing services among global
pharmaceutical manufacturers was approximately $41.5 billion in 1998, with
approximately $1.4 billion of these services performed by outside providers
such as SHS. Currently, the principal purchasers of outsourced healthcare
marketing services are pharmaceutical manufacturers. Although pharmaceutical
companies currently spend the majority of their marketing dollars on product
detailing, expenditures on promotional events and direct-to-consumer
advertising are growing at a rapid pace. These marketing techniques are under-
utilized by contract providers, representing significant opportunities for
expansion, especially among non-pharmaceutical companies in the life sciences
industry. We estimate that outsourcing has penetrated only approximately 3.4%
of the total market for healthcare marketing services among pharmaceutical
companies.

Trends Affecting Growth

We believe that the healthcare marketing services industry will continue to
grow at a rapid pace due to the following factors:

Trend Towards Outsourcing. Outsourcing marketing and sales activities
provides several benefits for life sciences companies. By utilizing outside
providers, they are able to convert fixed costs to variable costs. In addition,
outsourcing these marketing activities allows life sciences companies to focus
resources on their core competency: discovering and developing new products.
Utilization of outsourced marketing services provides

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strategic financial flexibility to the client by allowing it to shift assets
quickly and flexibly without causing internal dislocation. As the trend towards
outsourcing continues, we expect the amount spent on outsourced healthcare
marketing activities to increase substantially.

Low Market Penetration. We believe that the current low level of market
penetration provides a tremendous growth opportunity for a well-positioned,
fully integrated healthcare marketing services provider. Industry estimates
indicate that the number of outsourced sales representatives utilized by the
pharmaceutical industry in the United States increased from approximately 2.6%
of the total number of sales representatives in 1994 to 11.2% in 1997, leaving
a large potential for market share gains by the industry. We estimate that the
level of outsourcing is much lower for higher value-added services such as
product launch design and medical communications services.

Technological Breakthroughs. Pharmaceutical, biotechnology, medical device,
and diagnostics companies' ability to grow revenue and increase profitability
depends largely on introducing successful and innovative new products.
Scientific breakthroughs in the pharmaceutical and life sciences industries
have revolutionized the discovery process and caused the number of new products
to increase in recent years. Life sciences companies are significantly
increasing research and development expenses to develop new products and
maintain a steady flow of marketable products. For example, during 1998, the
industry trade group Pharmaceutical Research and Manufacturers of America
estimated that U.S. pharmaceutical companies spent approximately $21.1 billion
worldwide on research and development, up over 10% from 1997 figures.
Investment in research and development has produced a robust pipeline of future
opportunities for the life sciences industry, and, by extension, for healthcare
marketing service providers. As these companies continue to expand the pipeline
with the introduction of new products, the need for educational programs and
focused marketing plans will increase in tandem. In addition, new launches will
increasingly be focused on specific conditions and patient segments, creating a
greater benefit from a more flexible and targeted sales and marketing effort.

Regulatory Approval Process Streamlined and Harmonized. Changes in the U.S.
Food and Drug Administration approval process have complemented the increasing
research and development effort to bring new products to market. The FDA was
the subject of significant scrutiny during the early 1990s to improve
efficiency and reduce the review time for new drug applications. The result of
this scrutiny was the adoption of the FDA Modernization Act of 1997. Average
approval process times have declined dramatically during the 1990s, from 30.3
months for drugs approved in 1991 to 11.7 months for drugs approved in 1998.
Also, products designed for conditions with few existing treatment options
receive special "fast-track" process approval. The result of these reforms is
that the FDA renders faster approval decisions. In addition, regulatory
harmonization across countries is the norm, driven by the International
Conference on Harmonisation's efforts over the years. Pharmaceutical
manufacturers that file and receive regulatory approval in parallel in key
global markets now face the challenge of coordinating simultaneous launches
across these markets. An improving regulatory environment has contributed to
the large number of new life sciences products entering the market, increasing
the need for concentrated marketing efforts.

Favorable Demographics. Several demographic and medical trends also
contribute to strong sales growth prospects for pharmaceuticals and other life
sciences products. The aging baby boomer generation will have a tremendous
impact on the average age of the U.S. population, with adults over 65 as a
percentage of the population forecasted to increase from just over 30% in 1995
to over 50% of the population in 2020 according to the U.S. Census Bureau.
Since older adults tend to spend more money on pharmaceuticals than any other
segment of the population, we expect this demographic shift to stimulate the
demand for pharmaceutical and other life sciences products in the future.
Additionally, as total healthcare expenditures steadily increase, the potential
for national healthcare reform and the growing influence of managed care in the
U.S. has created substantial pressure to reduce healthcare costs. Cost control
pressures have also led to a growth in demand for minimally invasive
treatments, including the use of drug therapy as an alternative to surgery.
Many managed care companies view pharmaceuticals as an alternative to expensive
hospital stays, as well as an inexpensive preventative care mechanism that is
likely to reduce the frequency of emergency room visits. These trends represent
a significant growth opportunity for healthcare marketing services providers.

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The SHS Solution

By providing a complete line of value-added marketing services for the life
sciences industry, SHS is positioned to take advantage of this growth
opportunity. Our service offerings are designed to facilitate the development
and execution of marketing strategies as new products advance from clinical
trials to product launch and throughout their useful life. We believe that we
are not only one of the leading providers of healthcare marketing services, but
that we are also uniquely positioned to provide global integrated services that
address the full spectrum of client demands. To date, our clients are primarily
comprised of pharmaceutical companies, which are estimated to have outsourced
only 3.4% of the more than $41.5 billion annually they spend worldwide on such
services.

We serve our clients through three operating groups: Health Products Research
("HPR"), the Healthcare Communications Group ("HCG") and the Contract Sales
Group ("CSG"). These groups reflect the three primary aspects of the marketing
process for pharmaceutical and other life sciences products. First, the
product's targeted marketing and sales effort must be carefully designed to
maximize the manufacturer's return on investment (HPR); second, product
awareness and demand within the medical community must be created and
maintained throughout the pre- and post-launch marketing effort (HCG); third,
the product must be sold by a team of highly trained sales representatives
(CSG); and, finally, sales results must be constantly monitored and sales
strategies must be adjusted to respond to a dynamic marketplace (HPR). Each
group is integrated as part of the overall program but performs very specific
functions. Our clients have the choice of working with us across our full
spectrum of services or narrowly within one of these groups. There is
significant overlap among product lines and extensive opportunities for cross-
selling. Most of our largest clients have already begun to utilize the services
of more than one group.

Our three operating groups possess significant combined experience, having
developed and conducted successful marketing programs for hundreds of
individual pharmaceutical and life science products. This expertise spans most
therapeutic categories, including the significant markets of cardiology, anti-
infectives, oncology, and neurology. Our core competencies and track record of
proven success enables us to establish strong relationships with our clients'
senior marketing and sales personnel, leading to a high rate of repeat
business.

Our strategic goal is to provide the pharmaceutical and life sciences
industries with value-added support services that will enable our clients to
achieve superior product sales through higher market penetration.

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[Included here is a chart depicting the offering of SHS's services over the
pharmaceutical product development time line. The chart shows each group's role
in the product development time line.]

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SHS's Operating Groups

We offer the full spectrum of marketing and sales services through our three
operating groups: Health Products Research, the Healthcare Communications Group
and the Contract Sales Group.

Health Products Research

HPR is responsible for the design of a product launch program and monitoring
the program's development to maximize the potential for a product's success.
This is achieved by using proprietary software to analyze data compiled from
internal sources (such as the contract pharmaceutical salesforce) and third
parties (such as IMS Health Inc., a provider of market research data for the
healthcare industry) to determine specifically how a targeted strategy can
maximize asset utilization and return on investment for our clients.

HPR offers the following core services which it customizes for particular
clients:

. Market Segmentation Analyses

HPR conducts segmentation analyses of the physician universe using
pharmacy-level data in combination with numerous variables such as
product potential, market share, the medical professionals' specialties
and reputations as innovators, and many other individually weighted
qualitative and quantitative data points. Segmenting this physician-
level data supports analyses and modeling that is designed to address
issues such as promotion response, targeting, message development, and
forecasting. HPR also links segment data to primary market research to
identify differences in attitudes and estimate future prescribing
patterns.

. Promotion Planning and Evaluation (PROM sm)

HPR's proprietary PROMsm family of analytical models measures
historical promotion response by physicians from various personal and
non-personal promotional events (including market trials). This
provides a comprehensive understanding of the sales responsiveness to
an individual product or marketing effort. PROM sm is unique in that it
can measure a separate response for individual physicians by
promotional channel. PROM sm is also designed to quantify the
interactive effect of promotional media. This data is used to determine
the optimal promotional mix. Ultimately, PROM sm is used to provide
market intelligence to enhance market share, identify optimal sampling
levels, evaluate the cost of a detail over time, understand the impact
of marketing programs and measure field force(s) effectiveness.

. Resource Allocation (Single and Multi-Product)

Utilizing segmentation and promotional response data, HPR's resource
allocation models determine the resource needs for single-product or
multiple brand promotions.

The UniBrandsm model uses the output of a PROM sm analysis and market
research as inputs into a causal forecasting model that develops, by
brand, future promotion response curves and optimal, unconstrained
details by physician segment while considering future market events and
the knowledge of product management. Based on the response by promotion
type and an understanding of the interaction among promotion types, a
promotion mix analysis can determine the optimal promotion by brand.
The UniBrand sm approach focuses on increasing return on investment
through the evaluation of content and capital employed for each
promotion type. Additionally, it also identifies how one type of
promotion can substitute for and/or enhance other promotion types.

Once the future response curves have been calibrated by UniBrand sm,
this leading-edge technology can be incorporated in a multi-product
resource allocation model, or RAM sm. RAM sm is designed to maximize
sales and profits by determining optimal salesforce size and structure,
as well as

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constrained details across brands. The RAM sm approach also can be used
to examine "what if" scenarios for different strategic and tactical
alternatives.

. Call Planning System (CAPS sm)

Through its proprietary technologies, HPR's CAPSsm provides an easily
implemented targeting plan for the sales representative while ensuring
the optimum allocation of field force effort across brands and
physicians. The CAPS sm system determines the best call frequency and
brand detailing priorities for each physician. CAPS sm also supports
changes in the portfolio focus on short notice, thereby enabling
organizations to respond quickly to internal and external developments.

. Salesforce Deployment and Analysis Group

HPR provides strategic salesforce alignment and deployment strategies
for home office and field teams. Alignment services are conducted by
analysts with technical expertise as well as healthcare industry
experience who are committed to the design and realignment of
salesforces.

. Data Services

HPR provides healthcare-specific data management services by
integrating data from multiple sources, including internal legacy
systems and purchased third-party data, to identify opportunities that
drive business performance. Data service consultants design customized
data collection and manipulation software programs which analyze data,
maintain report generation functions and manage operational activities
such as production control, data clean-up, matching and ad hoc
projects.

. Strategic Consulting

HPR's consultants in the strategic planning group work with clients,
designing solutions for issues such as resource allocation,
forecasting, pricing, and compensation. Their focus on incorporating
best practices within the culture of organizations yields pragmatic and
easily implemented business solutions that can be integrated throughout
the organization.

HPR's distinctive process for developing strategic and tactical
resource allocation is predicated upon the linking of services and data
through solutions based on doctor-level intelligence. The direct link
that exists between the strategy and the data ensures pragmatic and
effective solutions and yields tangible results for our clients.

Healthcare Communications Group

HCG is responsible for the education of physicians and other decision makers
in the medical community regarding the profile of a new product. According to
the requirements of the client's marketing department, HCG will specifically
target the appropriate decision makers for maximum impact. The goal is to
provide sufficient information to generate interest and stimulate demand both
prior to and after a product launch. Therefore, the educational process begins
in early-stage clinical trials and is accomplished through a variety of media
customized to a client's needs.

HCG has developed a strong reputation and high rates of participation among
medical professionals by obtaining accreditation status with both the
Accreditation Counsel for Continuing Medical Education ("ACCME") and American
College of Physician Executives ("ACPE"). This distinction provides our
programs essential credibility in the medical community and mitigates the
skepticism of many physicians regarding information provided directly by life
sciences companies. In fact, our ACCME and ACPE accreditations have resulted in
significant attendance at HCG events because physicians are required by law to
participate in accredited education activities in order to maintain their
licenses.

The following is a description of several of our more frequently used product
formats for the delivery of information:

Monographs. HCG publishes highly focused educational reports which typically
carry ACCME or ACPE accreditation. Usually 12 to 24 pages in length, these
reports present topical, state-of-the-art materials on a specific clinical
issue by leading the practitioner through the treatment analysis for
appropriate patients.

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<PAGE>

Interactive CD-ROMs. Pharmaceutical companies have been allocating more
promotional spending into "alternative media," and HCG is well positioned to
serve their needs with its successful track record of developing CD-ROM
products. These interactive programs can be designed as a training tool for a
pharmaceutical company's own salesforce, a board review study guide for
physicians, or a self-paced instructional package on a wide variety of topics
for doctors, nurses, patients, and other target groups.

Full-Color Books. The group also publishes full-color books which range from
100 to 250 pages in length that can be designed to offer in-depth educational
discussion pieces or simply provide an attractive photographic journal narrated
by a well respected physician or medical archivist. As tabletop volumes or
softcover reference books, they provide ongoing reminders of the sponsoring
pharmaceutical company and/or product.

Audio Cassettes. Audio cassettes typically deliver topical information to
doctors such as lectures by leading physicians, roundtable discussions,
summaries of conferences, interviews with prominent specialists, and similar
information. Generally 30 to 60 minutes in length, they can be accredited or
non-accredited, but are always educational in nature or content.

Symposia. HCG products and services include the development and management of
all types of meetings, including symposia, satellite training teleconferences,
and advisory panels. Medical symposia typically involve physicians hearing
presentations regarding a drug or treatment protocol presented by a faculty of
experts in the field for the purpose of being trained to serve as consultants
and spokespeople for the sponsoring pharmaceutical company. Attendees and
faculty from numerous remote locations can also interact in satellite-
transmitted symposia organized by HCG.

Telemarketing. By providing a complete staff of trained telemarketers, our
telemarketing services significantly enhance a life sciences company's ability
to communicate effectively with physicians. These services give us the ability
to conduct physician awareness programs, focus group recruitment, physician
profiling, physician detailing, sampling follow-ups, qualification of sales
leads, phone surveys, consumer surveys, customer service, compliance building
and patient care management.

Direct Mail. HCG's direct mail capabilities are usually combined with its
integrated marketing programs to efficiently deliver materials to its target
audience. We offer a full complement of packaging and mailing services, as well
as state-of-the-art warehousing that provides quick and efficient assembly of
promotional programs and inventory tracking.

Sample Fulfillment. Registered with the FDA as a secondary re-packager, HCG
can assemble promotional materials, insert pharmaceutical samples under
controlled conditions and ship samples to potential prescribers from its
warehouse. The group's combination of pharmaceutical warehousing and direct
mail capabilities allow it to coordinate sample delivery with sales calls on
physicians as well as administer drug recalls and rebate programs, all part of
a seamless automated product offering for the client.

Other Products. In addition, HCG offers a number of auxiliary products and
services and maintains an ability to deliver content in substantially all forms
of media that life sciences companies use to communicate promotional
educational messages. Other media can involve drug utilization reviews, color
atlases, posters, videotapes, convention kiosks, screen savers, and Internet
educational programs. HCG also assists its clients through higher value-added
services such as product marketing strategy consulting, database management
focused towards sales targeting, and field sales support services.

HCG's ability to deliver its marketing and educational messages through a
wide range of media has enhanced our reputation as a "one-stop shop" offering
an integrated range of services to life sciences companies. However, each
marketing solution is customized to deliver a specific message to a highly
targeted audience. HCG also searches constantly for ways to expand its products
to meet the needs of our clients and combine its services with those of our
other operating groups. For example, offering avenues of support

27
<PAGE>

through the direct mail and sample fulfillment programs enables CSG's
salesforces to operate more efficiently and effectively by automating a
significant portion of the post-physician consultation follow-up work (such as
literature and sample mailings).

Contract Sales Group

CSG is responsible for the implementation and execution of outsourced sales
programs for prescription pharmaceutical and other life sciences products. This
service is otherwise known as "product detailing." CSG maintains and operates
the requisite systems, facilities, and support services to recruit and deploy a
customized, full-service and highly targeted salesforce within 8-12 weeks.
Currently, CSG operates one of the largest sales organizations in the United
States (larger, in fact, than many pharmaceutical companies), with
approximately 2,600 sales representatives in the U.S. and approximately 4,400
worldwide. It also has significant global coverage through its operations in
the United Kingdom, France, Germany, and Hungary.

Life sciences companies, particularly pharmaceutical manufacturers, have
traditionally relied upon product detailing as the primary means of influencing
prescription writing patterns and promoting their products. Product detailing
consists of a one-on-one meeting in a physician's office where a sales
representative reviews the medical profile of a product's FDA-approved
indications. Information provided by the sales representative includes the
product's role in treatment, efficacy, potential side-effects, dosage, danger
of contra-interactions with other drugs, cost, and any other appropriate
information. The dialogue is two-way with the salesperson collecting the views
of each individual physician. Discussions will often include topics such as the
type of patient most likely to benefit from a particular therapy as well as the
relative benefits of alternative products. This requires the salesperson to be
well-educated and highly trained, both of which are core competencies of CSG.
In addition, engaging in an educational dialogue with the medical professional,
the sales representative will provide free product samples as a supplement to
the sales effort. This affords the prescription writer and his or her patients
first-hand exposure to the medical product and creates a sense of familiarity
and comfort with the product.

Providing clients with the highest quality sales people requires effective
recruiting and training. To accomplish a coordinated recruiting effort, we
maintain a national recruitment office that locates and hires potential sales
representatives. Our in-house human resources team adheres to selective hiring
criteria and conducts detailed evaluations to ensure the highest-quality
representation for our clients. CSG's recruiters maintain a fully automated
database of qualified candidates for immediate hiring opportunities, and its
Internet home page offers an online application for employment. CSG hires a mix
of full-time and flex-time representatives in order to accommodate the
detailing level required by clients and maximize cost efficiency.

We also emphasize the training of our personnel, and believe we are the only
contract sales organization with a fully dedicated stand-alone training
department. CSG's professional development group has the largest dedicated
training facility of its type in the United States. Our goal is to ensure that
sales representatives are knowledgeable and operate professionally,
effectively, and efficiently. Topics such as sample accountability, negotiation
tactics, personal writing skills, integrity selling, time and territory
management, team productivity, and pharma-manager leadership are covered
extensively in order to prepare the representative for their eventual contact
with medical professionals. CSG's trainers are the top professionals in their
field and rely upon proprietary information regarding physician prescribing
behavior and industry best practices. In all, CSG offers over 20 separate
training programs. As the students are from both CSG's and our clients'
salesforces, the training and recruiting services are essential to maintaining
and building our relationships with the pharmaceutical companies. These
strengths are widely recognized as differentiating factors which benefit the
overall contract sales effort.

Once recruited and trained, CSG operates two types of salesforces: dedicated
or syndicated. A dedicated salesforce is responsible for the sales of only one
product or of multiple products of a single manufacturer. Dedicated salesforces
facilitate focus and one-on-one conversations with prescribing physicians. A
syndicated salesforce represents products of multiple manufacturers, and, as
such, the client purchases a share of the time

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<PAGE>

the salesperson spends with the physician, thereby decreasing overall cost for
the service. The applicability of each salesforce depends on the specific
circumstance and the client's portfolio of products. Syndicated salesforces are
seldom used in the U.S., but are common in the U.K. and parts of continental
Europe.

We are committed to providing our clients with customized cost-effective
sales support. This is reflected in the variety of options clients have to
choose from, including the type of salesforce (dedicated vs. syndicated), the
specialties of the salesforce (oncology, cardiology, etc.), the methodology
employed targeting decision makers in the medical community and the type of
analysis which is conducted based on the information the salesforce collects.
We work closely with our clients in all aspects of our service offering to
ensure maximum impact of the product's promotional effort.

The combination of our contract sales capabilities with HPR and HCG has
resulted in our proven ability to:

Maximize product launch tactics

Our salesforce has launched products where it had both partial and complete
promotional responsibility. The emphasis is on speed-to-market and impact, and
there are many examples where CSG's efforts have resulted in our client's
product becoming the most prescribed drug in its category within the first
three months.

Provide globally targeted pharmacy promotions

International and domestic coverage of independent and chain pharmacies for
product launch, pipeline fill, and other related programs enable us to provide
a simultaneous geographic launch. Given that regulatory filings by
pharmaceutical customers are now coordinated on a global basis, this capability
is an increasingly important competitive advantage.

Mobilize specialized field salesforces

CSG's ability to execute and implement tailored programs and sales teams for
managed care initiatives; hospital coverage for surgery, cardiac device, and
advanced wound care treatment products; and clinical laboratory programs
collectively demonstrate the utility to our clients of SHS's high level of
sales force training, mobilization and integration.

Support mature lines

Our services include the promotion of existing products in addition to
products emerging from our client's research pipeline. For example, we elevated
a ten-year-old product to a number one market share position in 13 months.

Collect and analyze sales information

We believe that CSG leads the industry in the collection and analysis of data
necessary to make marketing resource allocation decisions. Sales
representatives are equipped with palm-top computers, in order to collect sales
call and physician profiling information, which is uploaded into a central data
storage server after each day of sales calls. Our state-of-the-art information
processing system allows sales management teams to analyze real-time data
constantly, compare the results with targeted initiatives and historical data,
and make necessary adjustments to the sales strategy.

Our ability to increase the incremental sales of older life sciences products
and enhance the sale of newer products is critical to the financial success of
our clients. Our integrated approach to contract sales, experienced management
team, recruiting, professional training and development, and use of technology
provide the company with a competitive advantage in marketing products for our
clients. With the ability to leverage off of

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<PAGE>

the capabilities of HPR and HCG, CSG is well-positioned to provide value-added
services across an array of product types in the life sciences industry.

Case Study

The following case study illustrates the way in which we provide our clients
with integrated value-added marketing solutions across the full spectrum of our
product offerings.

A multinational pharmaceutical client was preparing to launch a group of new
drugs with an annual revenue potential in excess of $750 million. Due to a high
volume of new product launches, our client's internal marketing organization
was unable to properly address its newly expanded product offering. As a
result, our client sought an outside partner which could provide it with
effective sales and marketing solutions for its new brands. The goal was to
enable the client's sales force to focus on the existing product lines rather
than dilute its efforts by forcing it to conduct marketing programs for an
expanded offering. Additionally, by outsourcing this component of its marketing
effort, our client would not have to re-allocate resources from other areas,
such as research and development, to compensate for an expanded sales and
marketing program.

Our client charged us with the task of developing a comprehensive strategy
and requested that we submit a proposal which included a detailed overview of
an "optimal marketing program." As part of our proposal, we prepared a
customized program including identification of all anticipated
sales/promotional resources (sales representatives, medical education and
product sampling) required to properly market these new products. In addition,
we presented a strategy which outlined the development of a full field sales
support group as well as other ancillary services necessary to insure the
proper sales growth and market penetration of the new products. This client
ultimately signed a contract with us based upon our proposal, including a five
year marketing contract for the new products, with a long-term promotional
partnership extending beyond the contract that is designed to perpetuate the
sales effort until the patents expire.

To develop the optimal marketing program, Health Products Research used its
proprietary background research along with information gathered from strategy
meetings conducted with our client. These meetings were crucial in establishing
the preliminary expectations for the appropriate promotional requirements. In
addition, these meetings established which marketing techniques would be
acceptable from the client's perspective. The optimal marketing program
developed by our three operating groups included provisions for the sales group
size, management, and resource deployment, as well as plans for ancillary
services such as sales force training through our professional development
group, field force automation to handle the call reporting and sample
accountability, and the automation of management reports that will be required
to track sales and promotion progress. In addition, the marketing program
outlined the creation of educational materials, medical symposia, and sales
aids provided by the Healthcare Communications Group and ongoing analysis by
HPR to maximize the effectiveness of the effort.

To implement this marketing program, the Contract Sales Group began to
assemble the sales force and prepare the supplemental marketing materials.
First, by utilizing our 18 dedicated regional recruiters we screened and
selected the appropriate candidates for the sales force. Secondly, all training
materials and programs were customized for the new products and sales team. A
lead trainer was assigned to oversee the training and compilation of the
materials and to ensure that the highest levels of quality were maintained
throughout the training process. During the instruction, the managers and
representatives received product and systems training and gained exposure to
our proprietary selling skills program designed to teach behavioral traits
which are most successful in driving market share and revenue. Our management
information systems group ordered all the equipment necessary for the sales
team and worked directly with outside providers of sales force automation
software to ensure that their products were properly customized to meet out
client's needs.

Concurrently, HPR obtained and analyzed the pharmacy-level data (outlining
prescription writing trends among doctors) in order to identify and target the
appropriate audience within the medical community. In addition, HPR determined
the proper marketing approach and frequency of the representative visits to

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<PAGE>

maximize the promotional effort. The data were then loaded into our proprietary
Pharm-align program to identify the most lucrative sales territories. HPR then
created a call plan for each representative that was downloaded to the sales
representatives' palm-top computers.

Once deployed, the sales force was continually supported by our normal
business model which includes a consistent ongoing effort from all of our
groups. The project's national business director was part of all decisions
relating to the group and continues to sit on a team that oversees the
outsourced project. Additionally, HCG provided the medical education programs
created for the specific drugs. During the course of the five-year contract,
HPR will also conduct ongoing analysis of the promotional effort, gauging the
reaction to the medical education programs and continually monitoring market
conditions to insure that we are maximizing the return on investment for our
client's marketing expenditures.

This example provides an illustration of a situation where a client
approached us with a specific sales and marketing problem and, because of our
integrated service offering, we addressed all of the client's issues while
constantly evaluating and adjusting the marketing program to improve its
effectiveness.

In summary, we believe we are the leading global provider of value-added
service offerings to pharmaceutical and life sciences companies throughout the
product marketing and sales process. Our extensive corporate network offers a
comprehensive array of targeted marketing solutions to ensure results.

Competitive Advantages

Leading Global Healthcare Marketing and Sales Services Company. We are one of
the largest competitors in the global market for outsourced pharmaceutical
marketing solutions, with an estimated 24% worldwide market share and
significant operations throughout Western Europe (United Kingdom, Germany,
France and Hungary) and the United States. We are one of only two large-scale
providers of contract sales with at least a 20% worldwide market share and a
salesforce ranked first or second in size among outside providers in four of
the top five worldwide pharmaceutical markets. We are also one of the world's
largest providers of medical communications and strategic sales and marketing
planning. The healthcare marketing services industry is highly fragmented, with
most competitors remaining poorly capitalized and undermanaged. Unlike our
competitors, which may offer only selected services in specific locations, we
operate capably with equal success in any geography by providing the full range
of our services to foreign clients in their home markets. We service the
largest number of physicians, nurses, pharmacists, and formularies in the
industry. We reached an estimated 2.3 million individual healthcare
professionals during the past year. These people are regularly contacted by our
representatives--4.5 million calls on physicians in 1998 alone--enabling the
collection of valuable profiling data. Our large-scale presence in each key
market provides significant advantages in terms of experience, speed,
capabilities, and technology. Our broad geographic scope provides us with a
unique ability to serve our global pharmaceutical clients across their key
markets, an increasingly critical need in an era of simultaneous global
launches.

Broadest and Most Integrated Service Offering. We offer the broadest range of
services, from the education of physicians on a drug's development, through the
strategic analysis and design of a highly targeted product launch, to the
availability of approximately 4,400 sales representatives to implement the
plan. The comprehensive education programs include conventions, symposia and
Continuing Medical Education ("CME") credit classes necessary for physicians to
retain their license. When a drug is ready to be launched, Health Products
Research utilizes proprietary call planning, territory alignment and workload
analysis to ascertain the ideal staff levels and coverage required to reach
forecasts, subsequently monitoring progress on a real-time basis to maximize
return on investment for pharmaceutical clients. The deployment of the highest
quality salesforce is managed by a national recruitment team that ensures that
calls begin on a coordinated basis within 8-12 weeks.

Our business model is configured so that each product line supplements the
full spectrum of other product lines. Our relationship with our clients is
perpetuated by continual expansion of the services utilized by our

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<PAGE>

client base. The self-perpetuating nature of our business model also has
significant financial benefits. Our level of integration enables us to
participate in each cross-selling opportunity, which in turn guarantees the
potential to generate additional revenue streams. This advantage is unique to
SHS, as competitors generally have narrow product offering bands which result
in an inability to cross-sell products. We have leveraged our position to
capture higher-margin business and retain our focus on providing significant
value-added services. In addition, our ability to offer our sales and marketing
services on either a stand-alone or single-stop bundled basis enables higher
market share capture and a higher proportion of repeat business.

Proprietary Technologies and Data. We maintain and operate a number of
proprietary software programs and systems for marketing development and data
gathering. HCG develops interactive CD-ROMs for our clients which can be
designed to educate and train a pharmaceutical salesforce about a new drug,
provide a board review study guide for a physician, or function as a self-paced
instructional package on a wide variety of topics for medical target groups.
Pharmaceutical companies are allocating more marketing dollars to instructional
software due to the success of these tools, and our established expertise makes
us well positioned to serve this segment. To conduct strategic studies, HPR
employs a series of programs which were designed in-house and utilizes data
which is gathered and processed by our contract sales group. Simultaneous
access to the aforementioned resources enables HPR to produce unique and
intricate value-added studies for the benefit of our clients. These value-added
offerings are a significant advantage for us, directly translating into an
increase in our clients' return on investment through better salesforce sizing
and targeting and higher salesforce productivity. Moreover, we have made a
considerable investment in technology and are focused on using cutting-edge
salesforce automation tools to increase our efficiency. At present,
approximately half of our salesforce is currently equipped with palm-top
computers, and our deployment of this technology will increase throughout 1999.
Such real-time data is important for pharmaceutical clients during the launch
of a drug, allowing rapid profiling of the impact on targeted physicians and
facilitating the refinement of calling frequency and marketing tactics. We
believe these proprietary tools and technologies translate into higher
salesforce productivity and lower cost relative to many of our competitors.

Existing Broad "Blue Chip" Client Base. In addition to having the 20 largest
pharmaceutical companies comprise our core client base, we also serve a large
number of mid-size and smaller life sciences companies. As each of these
companies uses our services, our relationship is expanded and the opportunity
to cross-sell products increases. Due to the nature of the business, contracts
tend to be longer in duration and are rarely terminated prior to their
expiration. Our business is not overly concentrated on a small number of
clients. As a result, the existing client base, while not captive, is likely to
become more intertwined with us as the relationship grows in tandem with the
client's need for additional services.

Experienced and Visionary Management Team. Our team of strong managers have
an average of 17 years experience in the pharmaceutical and marketing
industries. This group includes entrepreneurs who founded their respective
businesses and continued to manage them after transitioning to Snyder, as well
as executives with substantial expertise managing pharmaceutical salesforces
and establishing sales and marketing strategies. We believe our mix of senior
management with pharmaceutical salesforce management, entrepreneurial talent
and strategic perspective is unique in the industry.

Our senior management team has outlined an exciting vision which includes
expanding the services offered by our communications unit, expanding HPR and
HCG in Europe, and developing Internet applications which allow physicians to
access our training materials online. Additionally, we intend to capitalize on
our real-time data access through our 4,400-person salesforce. We are known
throughout the industry for our innovative approach, both with pharmaceutical
clients and physicians. As a consequence, pharmaceutical clients have rewarded
us with contract extensions and high rates of repeat business. Physicians
routinely give us the highest marks in surveys of medical education programs.
Our CME program was recently awarded a four-year accreditation period by ACCME.
We are one of only a few ACCME-accredited commercial enterprises. Additionally,
we provide the most advanced strategic analysis in the industry through Health
Products Research.

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Clients

We provide our services to leading pharmaceutical, biotechnology, medical
device and diagnostics companies on a global basis. During 1998, we maintained
contracts with 210 clients, an increase of 50 individual clients from 1997. Our
blue chip client base includes all 20 of the largest pharmaceutical companies.
Our ten largest clients comprised approximately 54.4% and 51.3% of our revenues
in fiscal years 1997 and 1998, respectively, although no single client
accounted for more than 14% of our revenues in fiscal years 1998 and 1997,
respectively. We consider our close relationship with leading pharmaceutical
manufacturers to be an important competitive advantage, providing us with a
source for recurring revenues as well as sales growth opportunities as new
products are developed and launched. The services are sold to the same target
groups for each client, namely their marketing and sales departments. This
provides the basis for continuous interaction and feedback, allowing us to
continuously improve our services and identify new business opportunities, a
process augmented by the long-term nature of our contracts.

The vast majority of our largest clients are companies which have
international operations. We believe that these and other multinational
companies will seek outside providers that can provide sales and marketing
solutions which transcend national boundaries. We believe that we currently
have the scope and scale of services needed to effectively provide healthcare
marketing solutions to multinational clients.

Our contract sales agreements typically last from six months to five years.
As a result, our sustained relationships with blue chip clients provide us with
recurring revenue streams and service cross-selling opportunities. Our ability
to add value at every part of the product life cycle enhances our ability to
form long-lasting relationships with clients.

Our relationships with a client's marketing and sales organizations also
benefit from high switching costs, as retaining another salesforce and
redesigning a market program would create substantial additional expense and
cause losses in time and productivity for our clients. In addition, the
successful medical marketing outsourcers have established their reputations due
to sophisticated performance evaluation capabilities, and clients are unlikely
to use vendors without widely recognized expertise.

Selected Clients: Leading Life Science Companies
------------------------------------------------
3M Merck
Abbott Laboratories Novartis
Allergan Pfizer
AstraZeneca Pharmacia & Upjohn
Bausch & Lomb Procter & Gamble
Baxter Rhone-Poulenc
Bayer Roche
Boehringer Ingelheim Sankyo
Bristol-Myers Squibb Sanofi-Synthelabo
Chiron Schering-Plough
Eisai Searle (Monsanto)
Eli Lilly SmithKline Beecham
Endo Pharmaceuticals Solvay
Glaxo Wellcome UCB
Hoechst Marion Warner-Lambert
Roussel Yamanouchi
Johnson & Johnson
--------
Note: As of December 31, 1998.

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Competition

We believe that no other organization offers the same scope of integrated
healthcare marketing services as SHS. Our competitors include contract sales
organizations as well as contract research organizations that offer healthcare
marketing services. Additionally, drug distribution companies have indicated a
desire to enter this lucrative market by leveraging their knowledge base and
effecting strategic acquisitions. Each of our operating groups faces distinct
competitors in the individual markets in which the group operates. However,
none of our competitors provide the full scope of services we currently offer
through our three operating groups.

Contract Sales. A small number of providers comprise the market for contract
sales, which represents more than 75% of outsourcing revenues in the healthcare
marketing services market as a whole. SHS, Innovex (Quintiles), Professional
Detailing Inc., and Pharmaceutical Detailing Network combined accounted for
nearly 95% of the United States contract sales market share in 1997, with SHS
and Innovex being the only participants to have an international presence. None
of these organizations are a significant competitor with regard to healthcare
marketing services other than contract sales. The rest of the industry is
highly fragmented, with a large number of small providers attempting to develop
niche services.

Contract Marketing Services. The contract marketing services sector contains
many more competitors and is also highly fragmented. This is due in part to the
wide variety of marketing activities required by medical product companies,
including promotional meetings, symposia, video satellite conferencing, peer-
to-peer meetings, medical educational material and conferences, teleservices,
field force logistics and product management. As a result, accurate relative
market share is more difficult to define as we encounter different competitors
for each of these services. The only competitors of significant scale in the
broad marketing sector are narrowly focused: Boron LePore & Associates, which
provides peer-to-peer physician education meetings, and privately owned ZS
Associates, which provides strategic assessments similar to the services of
HPR. Neither of these organizations compete with us in the contract sales
market.

Employees

At March 31, 1999, we employed over 4,800 people worldwide, including
approximately 2,900 employees in the United States and 1,900 in Europe. Of
these employees, approximately 32% are part-time, primarily serving in the
contract salesforces in the United States and United Kingdom. For the most
part, we hire individuals with experience in pharmaceutical product sales and
with scientific or medical backgrounds. Approximately 40% of our employees have
advanced degrees. Our contract sales representatives also undergo specialized
training in order to gain knowledge of the products they sell, including an
understanding of its competitive position. Approximately 70% of our employees
have pharmaceutical industry experience, with an average of 11 years experience
among our U.S. salesforce.

<TABLE>
<CAPTION>
Sales Reps
and Managers Operations Total
------------ ---------- -----
<S> <C> <C> <C>
U.S. Contract Sales............................... 2,596 31 2,627
U.K. Contract Sales............................... 550 31 581
French Contract Sales............................. 1,001 48 1,049
German Contract Sales............................. 252 28 280
----- --- -----
Total Contract Sales.............................. 4,399 138 4,537
Healthcare Communications......................... N/A 181 181
Health Products Research.......................... N/A 91 91
----- --- -----
Total Worldwide Employees......................... 4,399 410 4,809
===== === =====
</TABLE>
- --------
As of March 31, 1999.

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Government Regulation

Several of the industries in which our clients operate are subject to varying
degrees of governmental regulation, particularly the pharmaceutical and
healthcare industries. Generally, compliance with these regulations is the
responsibility of our clients. However, we could be subject to a variety of
enforcement or private actions for our failure or the failure of our clients to
comply with such regulations.

In connection with the handling and distribution of pharmaceutical products
samples, we are subject to regulation by the Prescription Drug Marketing Act of
1987 and other applicable federal, state and local laws and regulations in the
United States, and certain regulations of the United Kingdom, France, Hungary,
Germany and the European Union. Pharmaceutical manufacturers and the healthcare
industry in general are subject to significant U.S. federal and state, U.K.,
French, German and European Union regulation.

Our physician education services are also subject to a variety of federal and
state regulations relating to both the education of medical professionals and
sale of pharmaceuticals. Any changes in such regulations or their application
could have a material adverse effect on SHS.

From time to time, state and federal legislation is proposed with regard to
the use of proprietary databases of consumer and health groups. The uncertainty
of the regulatory environment is increased by the fact that we generate and
receive data from many sources. As a result, there are many ways both domestic
and foreign governments might attempt to regulate our use of its data. Any such
restriction could have a material adverse effect on SHS.

Properties

Our headquarters is located in Somerset, New Jersey at a site we lease. SHS
and its operating subsidiaries own facilities in Boulder, Colorado and
Lenggries, Germany, with a total approximate area of 27,000 square feet, and
lease approximately 17 facilities with a total approximate area of 141,300
square feet, which includes warehouses, stores and offices. We believe that our
properties are well maintained and are in good operating condition.

<TABLE>
<CAPTION>
Location Square Footage
- -------- --------------
<S> <C>
Health Products Research
Whitehouse, New Jersey........................................... 11,500
Whitehouse, New Jersey........................................... 4,000
Ewing, New Jersey................................................ 2,972
Bridgewater, New Jersey.......................................... 2,600
Healthcare Communications Group
Stamford, Connecticut............................................ 56,005
Alpharetta, Georgia.............................................. 4,000
Hertogenbosch, Netherlands....................................... 2,000
Carlsbad, California............................................. 1,840
Southbury, Connecticut........................................... 865
Charleywood Herts, United Kingdom................................ 432
Boulder, Colorado................................................ 14,974
Contract Sales Group
Somerset, New Jersey............................................. 31,596
Basingstoke, United Kingdom...................................... 6,300
Basingstoke, United Kingdom...................................... 3,300
Budapest, Hungary................................................ 570
Neuilly, France.................................................. 10,760
Lenggries, Germany............................................... 11,997
Keszthely, Hungary............................................... 1,323
Laabimwalde, Austria............................................. 1,205
</TABLE>

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Legal Proceedings

From time to time we are involved in litigation incidental to our business.
In our opinion, no pending or threatened litigation of which we are aware has
had or is expected to have a material adverse effect on our results of
operations, financial condition or liquidity.

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SELECTED FINANCIAL DATA

The following table summarizes certain historical financial data with respect
to SHS and is qualified in its entirety by reference to, and should be read in
conjunction with, the SHS Historical Financial Statements and related notes
included elsewhere in this information statement. The historical financial data
for the years ended December 31, 1998, 1997 and 1996 have been derived from the
audited financial statements of SHS. Historical financial information may not
be indicative of SHS's future performance as an independent company. See also
"Unaudited Pro Forma Financial Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business."

<TABLE>
<CAPTION>
For the Three Months
Ended March 31, For the Years Ended December 31,
--------------------- ----------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---------- ---------- -------- --------- -------- -------- -------
(unaudited)
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Income
Data:
Revenues................ $ 86,939 $ 67,356 $321,500 $ 208,967 $144,704 $120,354 $91,865
========== ========== ======== ========= ======== ======== =======
Net income (loss)....... $ 5,089 $ (4,052) $ 1,446 $ (8,718) $ 83 $ 8,430 $ 5,306
========== ========== ======== ========= ======== ======== =======
Unaudited:
Pro forma historical
basic and diluted net
income (loss) per
share (4).............. $ 0.13 $ (0.11) $ 0.04 $ (0.23) $ -- $ 0.22 $ 0.14
========== ========== ======== ========= ======== ======== =======
Pro forma adjusted net
income
(loss)(1).............. $ 5,089 $ (4,052) $ 1,446 $ (10,700) $ (2,729) $ 5,131 $ 3,745
========== ========== ======== ========= ======== ======== =======
Pro forma adjusted basic
and diluted net income
(loss) per
share (1)(4)........... $ 0.13 $ (0.11) $ 0.04 $ (0.28) $ (0.07) $ 0.14 $ 0.10
========== ========== ======== ========= ======== ======== =======
Pro forma adjusted net
income
excluding nonrecurring
items (2).............. $ 6,305 $ 5,642 $ 24,739 $ 9,622 $ 7,393 $ 5,131 $ 3,745
========== ========== ======== ========= ======== ======== =======
Pro forma adjusted basic
and diluted net income
per share, excluding
nonrecurring
items (2)(4)........... $ 0.17 $ 0.15 $ 0.65 $ 0.25 $ 0.20 $ 0.14 $ 0.10
========== ========== ======== ========= ======== ======== =======
Shares used in computing
net income (loss) per
share (4).............. 37,790 37,790 37,790 37,790 37,790 37,790 37,790
========== ========== ======== ========= ======== ======== =======
Balance Sheet Data:
Total assets............ $224,251 $193,644 $ 100,947 $ 51,180 $ 58,623 $41,742
========== ======== ========= ======== ======== =======
Long-term debt.......... $ 1,336 $ 1,473 $ 4,154 $ 2,634 $ 1,420 $ 3,628
========== ======== ========= ======== ======== =======
Total investments and
advances from Snyder
Communications, Inc.
(3).................... $145,805 $119,727 $ 10,371 $ 4,697 $ 13,591 $ 6,683
========== ======== ========= ======== ======== =======
</TABLE>
- --------
(1) Prior to their respective acquisitions, certain U.S.-based acquirees were
not subject to federal or state income taxes. Pro forma adjusted net income
represents historical net income adjusted to reflect a provision for income
taxes as if SHS had been taxed similarly to a C corporation for all periods
presented.
(2)Pro forma adjusted net income, excluding nonrecurring items represents
historical net income adjusted to reflect a provision for income taxes as if
SHS had been taxed similarly to a C corporation for all periods presented
and the elimination of compensation to stockholders, recapitalization costs
and acquisition and related costs. Compensation to stockholders,
recapitalization costs and acquisition costs are considered to be
nonrecurring by SHS because SHS's current operations will not result in any
compensation to stockholders, recapitalization costs or acquisition costs in
future periods.
(3) Investments and advances from Snyder represent the net cash transferred to
SHS from Snyder and businesses acquired by Snyder and contributed to SHS.
No amounts are expected to be repaid to Snyder.
(4) For all periods presented, net income per share has been computed using
shares of SHS that will be issued upon the distribution based on the number
of outstanding shares of Snyder common stock on June 22, 1999. Basic and
diluted net income per share are the same for all periods presented, as
there will be no options to purchase SHS Common Stock granted until the
distribution.

37
<PAGE>

UNAUDITED PRO FORMA FINANCIAL DATA

The following unaudited pro forma financial data reflect the distribution as
of the beginning of each of the periods presented for pro forma income
statement data purposes. No pro forma balance sheet is presented as there were
no pro forma adjustments to the historical balance sheet. The unaudited pro
forma data reflect the estimated changes in corporate overhead as if SHS
operated as an independent entity, SHS's effective income tax rate subsequent
to the distribution and the effects of significant acquisitions as if they had
been consummated at the beginning of each of the periods presented. These data
do not necessarily reflect the results of operations or financial position of
SHS that would have resulted had the distribution actually been consummated as
of such dates. Also, these data are not indicative of the future results of
operations or future financial position of SHS.

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(in thousands)

<TABLE>
<CAPTION>
Healthcare Pro Forma Pro Forma
Historical Entries Healthcare
---------- --------- ----------
<S> <C> <C> <C>
Net revenues............................. $86,939 $ -- $86,939
Operating expenses:
Cost of services..................... 66,856 -- 66,856
Selling, general, and administrative
expenses............................ 10,346 1,871 (1)(4) 12,217
Compensation to stockholders......... -- -- --
Acquisition and related costs........ 1,576 -- 1,576
------- ------- -------
Income from operations................... 8,161 (1,871) 6,290
Interest expense......................... (41) -- (41)
Investment income........................ 278 -- 278
------- ------- -------
Income before income taxes............... 8,398 (1,871) 6,527
Income tax (provision) benefit........... (3,309) 716 (2) (2,593)
------- ------- -------
Net income............................... $ 5,089 $(1,155) $ 3,934
======= ======= =======
</TABLE>

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 1998
(in thousands)

<TABLE>
<CAPTION>
Purchased Pro
Healthcare Subsidiaries Forma Pro Forma
Historical Historical (3) Entries Healthcare
---------- -------------- ------- ----------
<S> <C> <C> <C> <C>
Net revenues............... $321,500 $10,505 $ -- $332,005
Operating expenses:
Cost of services....... 236,047 8,029 -- 244,076
Selling, general, and
administrative
expenses.............. 43,029 1,820 8,991 (1)(4) 53,840
Compensation to
stockholders.......... 742 -- -- 742
Acquisition and related
costs................. 26,922 -- -- 26,922
-------- ------- ------- --------
Income from operations..... 14,760 656 (8,991) 6,425
Interest expense........... (2,315) (1) -- (2,316)
Investment income.......... 1,850 2 -- 1,852
-------- ------- ------- --------
Income (loss) before income
taxes..................... 14,295 657 (8,991) 5,961
Income tax (provision)
benefit................... (12,849) (412) 3,479 (2) (9,782)
-------- ------- ------- --------
Net income (loss).......... $ 1,446 $ 245 $(5,512) $ (3,821)
======== ======= ======= ========
</TABLE>

38
<PAGE>

39
<PAGE>

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

This Management's Discussion and Analysis of Financial Condition and Results
of Operations covers periods prior to the Distribution, during which the
operating units of SHS were integrated with Snyder's other operating units. The
following information should be read in conjunction with SHS's Financial
Statements and notes thereto included elsewhere in this Information Statement.
See "Index to Financial Statements."

Overview

SHS's services are designed to establish and monitor strategic marketing
plans, to provide face-to-face interaction with physicians and to conduct
educational research and communication services. Snyder created the business
conducted by SHS in January 1997 in a merger transaction with a U.S. provider
of pharmaceutical sales and marketing services. During 1998 and 1997, Snyder
issued 6,475,105 and 4,035,184 shares, respectively, in pooling of interests
transactions with companies in the healthcare marketing services industry. Of
the total shares issued in pooling of interests transactions, 1,318,798 were to
Health Products Research, 6,008,210 were to companies in SHS's Contract Sales
Group, and 3,183,281 were to companies in SHS's Healthcare Communications
Group. We further expanded the size and geographic presence of our Contract
Sales Group with a purchase transaction valued at $19.4 million in August 1997
and with two purchase transactions valued at $54.4 million in the first quarter
of 1998. We also increased the scope of services offered by the Healthcare
Communications Group with a purchase transaction valued at $18.0 million in
March 1999.

We expect that the synergies created by the acquisitions described above will
increase our opportunities and strengthen our client relationships. We strive
to integrate our service capabilities within as well as across our three
operating groups to provide the full spectrum of healthcare marketing and sales
services. Health Products Research designs and monitors product launches and
sales strategies with our proprietary programs to maximize asset utilization
and return on investment for pharmaceutical and other life sciences companies.
The Healthcare Communications Group provides educational programs to physicians
and other healthcare professionals. The Contract Sales Group implements and
executes outsourced sales programs for pharmaceutical and other life sciences
products. Most of SHS's largest clients utilize the services of more than one
of our operating groups.

Results of Operations

Revenues and associated costs under pharmaceutical detailing contracts are
generally based on the number of physician calls made or the number of sales
representatives utilized. For consulting and educational services, SHS revenues
are generally based on a fixed project amount.

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

Compensation to stockholders consists of excess compensation paid to certain
stockholders of acquired companies prior to their respective mergers with SHS.
The amount by which the historical compensation of these stockholders exceeds
that provided in their employment contracts with SHS has been classified as
compensation to stockholders.

Recapitalization costs were recorded by one of the companies acquired by SHS
in 1998 at the time of its recapitalization in 1997.

40
<PAGE>

Acquisition and related costs consisted primarily of investment banking fees,
other professional service fees, certain tax payments and other contractual
payments resulting from the consummation of the pooling of interests
transactions, as well as the costs of consolidating certain of the Company's
acquired operations.

The following sets forth, for the periods indicated, certain components of
SHS's income statement data, including such data as a percentage of revenues.
Pro forma net income includes a provision for income taxes as if all operations
of SHS had been taxed as a C corporation for all periods presented. Pro forma
net income, excluding nonrecurring items, represents net income adjusted to
reflect a provision for income taxes as if SHS had been taxed similarly to a C
corporation for all periods presented and the elimination of compensation to
stockholders, recapitalization costs and acquisition costs. Compensation to
stockholders, recapitalization costs and acquisition costs are considered to be
nonrecurring by SHS because SHS's current operations will not result in any
compensation to stockholders, recapitalization costs or acquisition costs in
future periods.

<TABLE>
<CAPTION>
For the Three Months
Ended March 31, For the Years Ended December 31,
----------------------------- --------------------------------------------------
1999 1998 1998 1997 1996
------------- -------------- --------------- --------------- ---------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $86,939 100% $67,356 100.0% $321,500 100.0% $208,967 100.0% $144,704 100.0%
Operating expenses:
Cost of services........ 66,856 76.9 49,163 73.0 236,047 73.4 156,346 74.8 104,922 72.5
Selling, general, and
administrative
expenses............... 10,346 11.9 8,415 12.5 43,029 13.4 32,787 15.7 25,960 17.9
Compensation to
stockholders........... -- -- 236 0.4 742 0.2 15,638 7.5 12,340 8.5
Recapitalization costs.. -- -- -- -- -- -- 1,889 0.9 -- --
Acquisition and related
costs.................. 1,576 1.8 11,356 16.9 26,922 8.4 8,042 3.8 -- --
------- ---- ------- ----- -------- ----- -------- ----- -------- -----
Income (loss) from
operations............. 8,161 9.4 (1,814) (2.8) 14,760 4.6 (5,735) (2.7) 1,482 1.1
Interest expense........ (41) -- (525) (0.8) (2,315) (0.7) (1,617) (0.8) (691) (0.5)
Investment income....... 278 0.3 242 0.4 1,850 0.6 568 0.3 796 0.6
------- ---- ------- ----- -------- ----- -------- ----- -------- -----
Income (loss) before
income taxes........... 8,398 9.7 (2,097) (3.2) 14,295 4.5 (6,784) (3.2) 1,587 1.2
Income tax provision.... (3,309) (3.8) (1,955) (2.9) (12,849) (4.0) (1,934) (0.9) (1,504) (1.0)
------- ---- ------- ----- -------- ----- -------- ----- -------- -----
Net income (loss)....... $ 5,089 5.9% $(4,052) (6.1)% $ 1,446 0.5% $ (8,718) (4.1)% $ 83 0.2%
======= ==== ======= ===== ======== ===== ======== ===== ======== =====
Pro forma adjusted net
income (loss).......... $ 5,089 5.9% $(4,052) (6.1)% $ 1,446 0.5% $(10,700) (5.1)% $ (2,729) (1.9)%
======= ==== ======= ===== ======== ===== ======== ===== ======== =====
Pro forma adjusted net
income excluding non-
recurring costs........ $ 6,305 7.3% $ 5,642 8.4% $ 24,739 7.7% $ 9,622 4.6% $ 7,393 5.1%
======= ==== ======= ===== ======== ===== ======== ===== ======== =====
</TABLE>

Three Months Ended March 31, 1999, Compared to Three Months Ended March 31,
1998

Revenues. Revenues increased $19.5 million, or 28.9%, to $86.9 million in the
first quarter of 1999 from $67.4 million in the first quarter of 1998. Nearly
all of the revenue growth was achieved within our U.S. and French sales
operations. This includes revenue growth that resulted from the acquisitions of
Healthcare Promotions, LLC ("HCP") and CLI Pharma S.A. ("CLI Pharma"). HCP has
been integrated into our Contract Sales Group, and CLI Pharma has been
integrated into our French contract sales group.

Cost of services. Cost of services increased $17.7 million, or 36.0%, to
$66.9 million in the first quarter of 1999 from $49.2 million in the first
quarter of 1998. Cost of services as a percentage of revenues increased to
76.9% in the first quarter of 1999 from 73.0% in the first quarter of 1998.
Cost of sales as a percentage of revenues increased in both the Health Products
Research Group and the Contract Sales Group due in part to start-up costs
associated with new contracts.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $1.9 million, or 22.6%, to $10.3 million in
the first quarter of 1999 from $8.4 million in the first quarter of 1998.
Selling, general and administrative expenses as a percentage of revenues
remained fairly constant at

41
<PAGE>

11.9% in the first quarter of 1999 and 12.5% in the first quarter of 1998.
Selling, general and administrative expenses includes only those amounts
specifically identifiable to SHS and may increase in future periods when SHS
operates as a separate publicly traded company.

Compensation to Stockholders. No compensation to stockholders was recorded
during the three months ended March 31, 1999. Compensation to stockholders was
$0.2 million during the three months ended March 31, 1998. Compensation to
stockholders reflects compensation paid to certain stockholders of acquired
companies prior to their respective mergers with SHS that is in excess of the
compensation provided for in their employment contracts with SHS. No
compensation to stockholders is recorded subsequent to an acquisition by SHS.

Acquisition and Related Costs. SHS recorded $1.6 million in acquisition and
related costs during the three months ended March 31, 1999 due to the
consolidation and integration of certain of SHS's acquired operations within
the Healthcare Communications Group. The charge consists of $1.3 million in
severance and related costs associated with the termination of 23 employees,
and $0.3 million in consulting services and other costs related to these
integration activities. In 1998, we recorded a charge of approximately $10.7
million for costs necessary to consolidate and integrate certain of our
acquired operations in the U.S., U.K. and France. As of March 31, 1999, 128
employees had terminated employment with SHS and $5.7 million had been charged
against the total liability of $12.2 million. SHS recorded $11.4 million in
acquisition and related costs during the three months ended March 31, 1998, and
$7.0 million of these costs were related to the consummation of pooling of
interests transactions during the three months ended March 31, 1998. SHS
completed two pooling of interests transactions valued at approximately $91.4
million during the three months ended March 31, 1998. The remaining $4.4
million was due to the consolidation and integration of certain of SHS's
acquired operations within the Contract Sales Group.

Interest Expense. SHS recorded $0.04 million of interest expense during the
three months ended March 31, 1999 and $0.5 million of interest expense during
the three months ended March 31, 1998. SHS does not have any significant debt
obligations outstanding. The interest expense recorded during the three months
ended March 31, 1998 consists primarily of interest on debt at acquired
companies prior to their acquisition by SHS. SHS generally repaid the debt of
its acquired companies.

Investment Income. Investment income was fairly constant during the first
quarters of 1999 and 1998. SHS recorded $0.3 million of investment income
during the three months ended March 31, 1999 and $0.2 million of investment
income during the three months ended March 31, 1998.

Income Tax Provision. SHS recorded a tax provision of $3.3 million during the
three months ended March 31, 1999. SHS's effective tax rate on its recurring
operations is approximately 36.8% for the three months ended March 31, 1999.
The actual tax provision recorded differs from the effective rate due to the
nondeductibility of certain of the nonrecurring costs recorded during the
period as well as the tax status of certain of the acquired companies prior to
their mergers with SHS. Pro forma income discussed below includes a provision
for income taxes as if all of our operations had been taxed as a C corporation
for the three months ended March 31, 1999.

Net Income (Loss). Net income increased $9.2 million to $5.1 million in the
first quarter of 1999 from a loss of $4.1 million in the first quarter of 1998
due primarily to SHS's overall growth and the decrease in nonrecurring
acquisition and related costs.

Pro forma adjusted net income excluding nonrecurring costs increased $0.7
million, or 12.5%, to $6.3 million in the first quarter of 1999 from $5.6
million in the first quarter of 1998. Pro forma adjusted net income excluding
nonrecurring costs increased because revenue growth exceeded growth in selling,
general and administrative expenses despite the decreasing gross margins.

Year Ended December 31, 1998, Compared to Year Ended December 31, 1997

Revenues. Revenues increased $112.5 million, or 53.8%, to $321.5 million in
1998 from $209.0 million in 1997. SHS experienced growth in the services
provided to both new and existing customers during 1998.

42
<PAGE>

This includes revenue growth resulting from the acquisitions of HCP and CLI
Pharma in purchase transactions completed during the first quarter of 1998.

Cost of Services. Cost of Services increased $79.7 million, or 51.0%, to
$236.0 million in 1998 from $156.3 million in 1997. Cost of services as a
percentage of revenues decreased to 73.4% in 1998 from 74.8% in 1997. This is
due to SHS's overall growth and the ability of the client support personnel to
handle increased client services.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $10.2 million, or 31.1%, to $43.0 million in
1998 from $32.8 million in 1997. Selling, general and administrative expenses
as a percentage of revenues decreased to 13.4% in 1998 from 15.7% in 1997 due
primarily to the revenue growth from the significant increase in services
provided throughout 1998.

Compensation to Stockholders. Compensation to stockholders was $0.7 million
in 1998 and $15.6 million in 1997. Compensation to stockholders reflects
compensation paid to certain stockholders of acquired companies prior to their
respective mergers with SHS that is in excess of the compensation provided for
in their employment contracts with SHS. The amount by which the historical
compensation paid to these stockholders exceeds the amount provided for in
their respective employment contracts with SHS has been classified as
compensation to stockholders. No compensation to stockholders is recorded
subsequent to an acquisition by SHS. The $0.7 million recorded in 1998 relates
to certain companies acquired in the third and fourth quarters of 1998, and
therefore, was incurred during 1998 by the acquired companies prior to their
acquisition.

Acquisition and Related Costs. SHS recorded $26.9 million in nonrecurring
acquisition and related costs during 1998. These costs were primarily related
to the consummation of acquisitions and consisted of investment banking fees,
expenses associated with the accelerated vesting of options held by employees
of certain acquired companies, other professional service fees, transfer taxes
and other contractual payments. In addition, this amount included a charge of
approximately $10.7 million for costs necessary to consolidate and integrate
certain of SHS's acquired operations in the U.S., the U.K. and France. SHS is
integrating acquired subsidiaries that provide similar services within the same
geographic regions. Approximately nine locations will be consolidated into
four, and the efforts will not have a significant impact on SHS's workforce.
SHS expects these integration activities to be substantially complete by the
third quarter of 1999. The charge consists of $4.1 million to consolidate and
terminate lease obligations, $5.3 million of severance and other costs
associated with the termination of 142 employees, and $1.3 million of fees
incurred for consulting services and other costs related to these integration
activities. The employees who were terminated were primarily redundant
operations and administrative personnel, as well as one under-utilized sales
team in the U.K.

SHS recorded $8.0 million in nonrecurring acquisition and related costs
during 1997 related to the consummation of acquisitions. These costs are
discussed further in the review of SHS's results of operations for 1997 as
compared to 1996.

Interest Expense. SHS recorded $2.3 million of interest expense in 1998 and
$1.6 million of interest expense in 1997. SHS does not have any significant
debt obligations outstanding. The interest expense recorded in both 1998 and
1997 consists primarily of interest on debt at acquired companies prior to
their acquisition by SHS. SHS generally repaid the debt of acquired companies.

Investment Income. SHS recorded $1.9 million of investment income in 1998 and
$0.6 million of investment income in 1997. The increase in investment income
corresponds to the increase in funds available for investment.

Income Tax Provision. SHS recorded a tax provision of $12.8 million during
1998. SHS's effective tax rate on its recurring operations is approximately
41.0% in 1998. The actual tax provision recorded differs from the effective
rate due to the nondeductibility of certain of the nonrecurring costs recorded
during the period. Pro forma income discussed below includes a provision for
income taxes as if all our operations had been taxed as a C corporation for the
year ended 1998.

43
<PAGE>

Net Income (Loss). Net income increased $10.1 million to income of $1.4
million in 1998 from a loss of $8.7 million in 1997 due primarily to SHS's
overall growth and containment of costs.

Pro Forma Adjusted Net Income (Loss). Pro forma adjusted net income (loss)
increased $12.1 million to net income of $1.4 million in 1998 from a net loss
of $10.7 million in 1997, due primarily to the overall growth in revenues and
containment of costs. Revenue growth exceeded the growth in cost of services
and selling, general and administrative expenses. Pro forma net income adjusted
to exclude nonrecurring costs, consisting of compensation to stockholders,
recapitalization costs and acquisition and related costs, increased $15.1
million, or 157.3%, to $24.7 million in 1998 from $9.6 million in 1997.

Year Ended December 31, 1997, Compared to Year Ended December 31, 1996

Revenues. Revenues increased $64.3 million, or 44.4%, to $209.0 million in
1997 from $144.7 million in 1996. SHS experienced growth in the services
provided to both new and existing customers during 1997. Services increased
most to those customers for which SHS provides contract sales services.

Cost of Services. Cost of services increased $51.4 million, or 49.0%, to
$156.3 million in 1997 from $104.9 million in 1996. Cost of services as a
percentage of revenues increased to 74.8% in 1997 from 72.5% in 1996. An
increase in cost of services as a percentage of revenues to provide healthcare
educational services was offset by a decrease in cost of services as a
percentage of revenues to provide contract sales services, resulting in the
overall increase in cost of services as a percentage of revenues.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $6.8 million, or 26.2%, to $32.8 million in
1997 from $26.0 million in 1996. Selling, general and administrative expenses
as a percentage of revenues decreased to 15.7% in 1997 from 17.9% in 1996
because a moderate increase in overhead expenses was spread over a larger base
of revenues.

Compensation to Stockholders. Compensation to stockholders was $15.6 million
in 1997 and $12.3 million in 1996. Compensation to stockholders reflects
compensation paid to certain stockholders of acquired companies prior to their
respective mergers with SHS that is in excess of the compensation provided for
in their employment contracts with SHS. The amount by which the historical
compensation paid to these stockholders exceeds the amount provided for in
their respective employment contracts with SHS has been classified as
compensation to stockholders. No compensation to stockholders is recorded
subsequent to an acquisition by SHS. The composition of the amount recorded in
1997 varies from the amount recorded in 1996 because the amounts recorded were
based on specific criteria and agreements at certain acquired companies that
existed in 1997 and in 1996 prior to their respective mergers with SHS.

Recapitalization Costs. Recapitalization costs were $1.9 million in 1997. One
of our acquired entities completed a recapitalization in 1997 prior to its 1998
merger with SHS. No recapitalization costs were incurred in 1996, and SHS does
not expect to incur any recapitalization costs in future periods.

Acquisition and Related Costs. SHS recorded $8.0 million in nonrecurring
acquisition and related costs during 1997. These costs were directly related to
the consummation of acquisitions and included primarily investment banking
fees, other professional service fees and certain U.K. excise and transfer
taxes.

Interest Expense. SHS recorded $1.6 million of interest expense in 1997 and
$0.7 million of interest expense in 1996. SHS does not have any significant
debt obligations outstanding. The interest expense recorded in both 1997 and
1996 consists primarily of interest on debt at acquired companies prior to
their acquisition by SHS. SHS generally repaid the debt of acquired companies.

Investment Income. SHS recorded $0.6 million of investment income in 1997 and
$0.8 million of investment income in 1996. The amount recorded in investment
income is directly related to the amount of funds available for investment.

Income Tax Provision. SHS recorded a tax provision of $1.9 million during
1997. SHS's effective tax rate on its recurring operations is approximately
48.8% in 1997. The actual tax provision recorded differs from the effective
rate due to the nondeductibility of certain of the nonrecurring costs recorded
during the period. Pro forma income discussed below includes a provision for
income taxes as if all of our operations had been taxed as a C corporation for
the year ended 1997.

44
<PAGE>

Net Income (Loss). Net income decreased $8.8 million to a loss of $8.7
million in 1997 from income of $83,000 in 1996 due primarily to the
nonrecurring costs incurred by SHS through its 1997 acquisitions.

Pro Forma Adjusted Net Income (Loss). Pro forma adjusted net loss increased
$8.0 million to a net loss of $10.7 million in 1997 from a net loss of $2.7
million in 1996. The nonrecurring costs recorded in 1997, slightly offset by
the growth of SHS, resulted in the overall increase in pro forma net loss. Pro
forma net income adjusted to exclude nonrecurring costs, consisting of
compensation to stockholders, recapitalization costs and acquisition and
related costs increased $2.2 million, or 29.7%, to $9.6 million in 1997 from
$7.4 million in 1996. The increase in pro forma net income adjusted to exclude
nonrecurring costs is consistent with the overall growth of SHS.

Liquidity and Capital Resources

At March 31, 1999, SHS had $24.3 million in cash and equivalents. Cash and
equivalents decreased $1.4 million during the three months ended March 31,
1999, due to the $5.6 million used in operating activities, the $0.3 million
used in investing activities and the $0.1 million effect of changes in the
exchange rate offset by the $4.6 million provided by financing activities. The
$4.6 million in cash provided by financing activities consists primarily of the
investments and advances from Snyder offset by net repayments of debt. The
$0.3 million in cash used in investing activities consists primarily of capital
expenditures and the purchases of subsidiaries, net of cash acquired. Cash and
cash equivalents increased $7.6 million for the year ended December 31, 1998,
due to $15.8 million provided by financing activities and the $0.2 million
effect of exchange rate changes, offset by $1.2 million used in operating
activities and the $7.2 million used in investing activities.

We believe that our cash and equivalents, as well as the cash provided by
operations, will be sufficient to fund its current operations, planned capital
expenditures and anticipated growth. SHS expects to obtain a line of credit for
general corporate purposes during the third quarter of 1999.

SHS has assessed its current systems and equipment with regard to year 2000.
We believe that these systems and equipment are year 2000 compliant and that
significant additional costs will not be incurred. However, we cannot assure
you that this will be the case until these systems are operational in 2000.

We are subject to the impact of foreign currency fluctuations, specifically
that of the British pound and French franc. To date, changes in the British
pound and French franc exchange rates have not had a material impact on our
liquidity or results of operations. We continually evaluate its exposure to
exchange rate risk but do not currently hedge such risk.

Given the extent of our services currently provided in continental Europe and
the nature of those services, we do not expect the introduction of the Euro to
have a material impact on our operations or cash flows. We will continue to
evaluate the impact of the introduction of the Euro as it continues to expand
the services offered and the European locations in which it operates.

Effect of Inflation

Quantitative and Qualitative Disclosures About Market Risk

At December 31, 1998, we had approximately $1.5 million of long-term debt.
Based upon the relative insignificance of long-term debt to our financial
position, we do not believe that we have significant exposure to the volatility
of interest rates. Approximately 45.3% of our revenues are earned outside of
the United States, with the majority earned in the United Kingdom and France,
but also in Germany and Hungary. All foreign operations incur both income and
expenses in their local currency, and accordingly, we do not believe we have
significant economic exposure to fluctuations in foreign exchange rates.
Because we are required to report our foreign operations as if they had been
incurred in U.S. dollars, fluctuations in foreign exchange rates could have a
detrimental impact on our reported financial results under generally accepted
accounting principles. We do not currently engage in hedging or other market
risk management tools.

45
<PAGE>

MANAGEMENT

Directors

The following individuals are expected to serve as directors of SHS after the
distribution.

<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Daniel M. Snyder................... 34 Co-Chairperson of the Board of Directors
Michele D. Snyder.................. 36 Co-Chairperson of the Board of Directors
Mortimer B. Zuckerman.............. 62 Director
Fred Drasner....................... 56 Director
Eran Broshy........................ 40 Director and Chief Executive Officer
</TABLE>

Daniel M. Snyder, Co-Chairperson of the Board of Directors, is a founder of
Snyder Communications, and has served as Chairman of the Board of Directors and
Chief Executive Officer of Snyder Communications since its predecessor company
was founded in 1987.

Michele D. Snyder, Co-Chairperson of the Board of Directors, is a founder of
Snyder, and serves as Vice Chairman, President and Chief Executive Officer and
a director of Snyder. Ms. Snyder is Mr. Snyder's sister.

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

Fred Drasner, a director of SHS, has been a director of Snyder since 1996,
the Chief Executive Officer of Daily News, L.P. and Co-Publisher of the New
York Daily News since 1993, the President of U.S. News & World Report, L.P.
from 1985 to February 1997 and Chief Executive Officer of U.S. News & World
Report since 1985, the Chairman and Chief Executive Officer of Applied Graphics
Technologies, Inc. since April 1996, the Chief Executive Officer of Applied
Printing Technologies, L.P. since 1986 and the Vice-Chairman and Chief
Executive Officer of The Atlantic Monthly Company since 1986.

Eran Broshy, Chief Executive Officer and a director of SHS, served as the
practice leader of the North American healthcare consulting practice of the
Boston Consulting Group from 1991 to 1998. Since 1998, Mr. Broshy served as
President and Chief Executive Officer of Coelcanth Corporation, a privately-
held biotechnology company. Mr. Broshy is a graduate of the Harvard School of
Business Administration (MBA), Stanford University (MS), and Massachusetts
Institute of Technology (BS).

In addition to the above-named directors, additional independent
directors will be designated prior to the distribution.

Directors' Meetings and Committees

The Board of Directors of SHS will have a number of standing committees,
including an Audit Committee and a Compensation Committee.

Audit Committee. The Audit Committee of the Board of Directors of SHS will
review and make reports and recommendations to the full Board of Directors with
respect to the selection of the independent auditors of SHS and its
subsidiaries, the arrangements for the scope of the audits to be performed by
them and the internal audit activities, accounting procedures and controls of
SHS, and will review the annual financial statements of SHS. The members of the
Audit Committee will be and , with serving as
Chair of the Audit Committee.

Compensation Committee. The Compensation Committee of the Board of Directors
of SHS will be responsible for approving compensation arrangements for
executive management, reviewing compensation

46
<PAGE>

plans relating to officers, grants of options and other benefits under SHS's
employee benefit plans and reviewing generally SHS's employee compensation
policy. The members of the Compensation Committee will be and
, with serving as Chair of the Compensation
Committee.

Compensation of Directors

We are currently in the process of reviewing our director compensation. We
anticipate that each director who is neither an officer nor an employee of SHS
will receive an annual director's fee paid in either cash, shares of SHS common
stock, or stock options. Directors will also be reimbursed for expenses
incurred in connection with attending meetings.

Executive Officers

The following individuals are expected to serve as executive officers of SHS
after the distribution.

<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Eran Broshy............................ 40 Chief Executive Officer and Director
Robert Brown, Ph.D..................... 55 President, Health Products Research
R. Jeremy Stone, M.D................... 34 President, UK Healthcare Sales
Allan Avery............................ 38 President, Healthcare Communications
William C. Pollock..................... 45 President, Healthcare Sales
</TABLE>

For a description of Eran Broshy's background, see "Management--Directors."

Robert Brown, Ph.D., has served as President of Health Product Research, Inc.
(HPR), a subsidiary of Snyder, for over 25 years. For the last 20 years, Dr.
Brown has consulted on a worldwide basis to many major pharmaceutical and
medical products companies. Before joining HPR, Dr. Brown was a manager of
Corporate Marketing Services at Johnson & Johnson. He holds a doctorate in
Operations Research from George Washington University.

R. Jeremy Stone, M.D., has served as President of Snyder's UK Healthcare
Sales division since December 1998. Prior to joining Snyder in 1998, Dr. Stone
founded the healthcare practice for the search firm Heidrick & Struggles
International in 1997. From 1994 to 1997, Dr. Stone served as a Senior Managing
Consultant for Gemini Consulting, a strategy, change and general management
implementation firm. Dr. Stone has an MBA and diploma in Management for Doctors
from the University of Keele and a diploma in Anaesthetics from the Royal
College of Anaesthestists.

Allan Avery has served as President of Snyder Healthcare Communications
Worldwide, Inc., a subsidiary of Snyder since 1997 and has over 16 years of
healthcare industry experience. Mr. Avery led the integration of two world-
class integrated educational and marketing solutions companies for the
pharmaceutical industry, including GEM Communications, Inc., which he founded
in 1992. He previously held management positions with PRO Communications, an
educational project company, and Marion Laboratories (now Hoechst Marion
Roussel).

William C. Pollock has served as President of Snyder's US Healthcare Sales
division since February 1998. Prior to joining Snyder, Mr. Pollock served as
the President of Healthcare Promotions, LLC from August 1994 until February
1998, and held an executive position with Schering-Plough Corporation for the
four preceeding years. With 18 years of experience in the pharmaceutical
industry, Mr. Pollock's responsibilities have ranged from sales management to
marketing. He also previously held an executive position with Johnson &
Johnson.

47
<PAGE>

EXECUTIVE COMPENSATION

Historical Compensation

The following table sets forth certain information with respect to the annual
and long-term compensation of SHS's four most highly compensated executive
officers for fiscal 1998 and SHS's Chief Executive Officer, who was not
employed by SHS until June 1999. During the periods presented, the individuals
were compensated in accordance with Snyder's plans and policies. All references
in the following tables to stock options relate to awards of options to
purchase shares of Snyder common stock.

Summary Compensation Table

<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
---------------------------- ------------------
Awards Payouts
---------- -------
Restricted Securities All Other
Name and Fiscal Stock Underlying LTIP Compensation
Principal Position Year Salary Bonus($) Award(s) Options(#) Payouts ($)
- ------------------ ------ -------- -------- ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Eran Broshy(1).......... 1998 -- -- -- -- -- --
Robert Brown, Ph.D. .... 1998 $210,000 -- -- 100,000 -- --
R. Jeremy Stone,
M.D.(2)................ 1998 $ 20,125 -- -- 105,000 -- --
Allan Avery............. 1998 $218,750 -- -- 200,000 -- --
William C. Pollock...... 1998 $240,000 $155,000 -- 75,000 -- --
</TABLE>
- --------
(1) Mr. Broshy was not employed by Snyder in 1998. He joined Snyder in June
1999.
(2) Dr. Stone began his employment with Snyder in December 1998, and the salary
amount included in the table above reflects compensation received in 1998.
If Dr. Stone had been employed for the full year, his annual base salary
would have been $241,500.

Option Grants in Fiscal 1998

The following table sets forth information with respect to option grants
during fiscal 1998 to the individuals named in the Summary Compensation Table
pursuant to Snyder plans.

<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------
Potential Realizable
% of Total Value at Assumed Annual
Options Rates of Stock Price
Number of Granted to Exercise Appreciation for Option Term
Options Employees in Price Expiration -----------------------------
Name Granted Fiscal Year ($/Share) Date 5% 10%
- ---- --------- ------------ --------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Eran Broshy............. -- -- -- -- -- --
Robert Brown, Ph.D. .... 100,000 0.91% 30.43750 2/12/08 $ 1,759,591.21 $ 4,377,190.27
R. Jeremy Stone, M.D. .. 100,000 0.91% 28.3750 12/16/08 $ 1,784,488.50 $ 4,522,244.23
5,000 0.05% 28.3750 12/16/08 $ 89,224.43 $ 226,112.21
Allan Avery............. 50,000 0.46% 30.43750 11/25/07 $ 854,567.25 $ 2,112,836.76
150,000 1.37% 28.3750 12/16/08 $ 2,676,732.76 $ 6,783,366.35
William C. Pollock...... 75,000 0.68% 30.43750 2/12/08 $ 1,319,693.41 $ 3,282,892.70
</TABLE>

Option Exercises in Fiscal 1998

The following table sets forth the number of shares of Snyder common stock
covered by both exercisable and unexercisable stock options held by each of the
individuals named in the Summary Compensation Table on December 31, 1998. Also
reported are the values for "in-the-money" options, calculated as the excess of
the value of shares of Snyder common stock as of December 31, 1998 over the
respective exercise prices of outstanding stock options.

48
<PAGE>

<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Snyder Options at Snyder Options at
Shares Fiscal Year-End(#) Fiscal Year-End($)
Acquired on Value ------------------------- -------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Eran Broshy............. -- -- -- -- -- --
Robert Brown, Ph.D...... -- -- -- 100,000 -- $331,250.00
R. Jeremy Stone, M.D.... -- -- 5,000 100,000 $26,875.00 $537,500.00
Allan Avery............. -- -- 12,500 187,500 $41,406.75 $930,468.75
William C. Pollock...... -- -- -- 75,000 -- $248,437.50
</TABLE>

SHS Compensation and Benefit Plans

The separation of the healthcare services business from the remaining
businesses of Snyder in connection with the distribution will allow SHS to
compensate its executive officers based on the performance of its healthcare
marketing services business. In particular, Eran Broshy, Chief Executive
Officer, and the other key members of SHS's management team will receive stock
compensation in the form of options to purchase SHS common stock.

Pursuant to Eran Broshy's employment agreement, he will receive an aggregate
of $4,000,000 in options to purchase shares of SHS common stock and an
aggregate of $2,500,000 in restricted SHS common stock in connection with the
consummation of the distribution. See "Executive Compensation--Employment
Agreements." Each of the other members of SHS's management team listed above
will be granted $500,000 in restricted SHS common stock on the distribution
date at the closing price of SHS common stock on the distribution date. Forty
percent of these shares of restricted SHS common stock will vest on the
distribution date, and the balance will vest in equal installments over the
next four years.

It is anticipated that total compensation for SHS's executive officers after
the distribution will include base salary, the stock-based incentives described
above and other benefits pursuant to the employee benefit plans described
below. It is anticipated that base salaries and total compensation
opportunities will be competitive as measured against industry norms.

Set forth below is a summary of the components of SHS's executive
compensation following the distribution:

1999 Stock Incentive Plan

The purpose of the 1999 Stock Incentive Plan is to promote the long-term
growth of SHS by rewarding key management employees, consultants and directors
of SHS with a proprietary interest in SHS for outstanding long-term performance
and also to attract, motivate and retain highly qualified and capable personnel
to these positions. The plan is administered by the Compensation Committee of
the Board of Directors of SHS. The participants in the plan are the officers,
key employees, directors and consultants of SHS, and the awards to a
participant under the plan may be in the form of a non-qualified stock option,
an incentive stock option, restricted stock, a stock appreciation right, or a
combination thereof, at the discretion of the Compensation Committee.

Reservation of Shares. Under the 1999 Stock Incentive Plan,
shares of SHS common stock will be reserved for issuance. The shares of SHS
common stock to be issued will be made available from authorized but unissued
shares of SHS common stock or issued shares that have been reacquired by SHS.
If any shares of SHS common stock that are the subject of an award are not
issued and cease to be issuable for any reason, such shares will no longer be
charged against the maximum share limitations and may again be made subject to
awards. In the event of certain corporate reorganizations, recapitalizations,
or other specified corporate transactions affecting SHS or the SHS common
stock, proportionate adjustments may be made to the number of shares available
for grant, as well as the other maximum share limitations, under the plan, and
the number of shares and prices under outstanding awards.

49
<PAGE>

Duration. The 1999 Stock Incentive Plan has a term of years, subject to
earlier termination or amendment.

Administration. The 1999 Stock Incentive Plan will be administered by the
Compensation Committee of SHS's Board of Directors. Subject to the limitations
set forth in the plan, the Compensation Committee has the authority to
determine the persons to whom awards are granted, the types of awards to be
granted, the time at which awards will be granted, the number of shares, units
or other rights subject to each award, the exercise, base or purchase price of
an award (if any), the time or times at which the award will become vested,
exercisable or payable, and the duration of the award.

Eligibility. All employees of SHS and its subsidiaries and, in the case of
awards other than incentive stock options, any consultant or independent
contractor providing services to SHS or its subsidiaries, will be eligible to
be granted awards under the plan, as selected from time to time by the
Compensation Committee in its sole discretion.

Types of Awards. The 1999 Stock Incentive Plan authorizes the grant of the
following types of awards:

. Stock Options (nonqualified and incentive stock options). The maximum
number of shares that may be covered under options granted to any
individual in any calendar year is shares. The exercise
price of an option may be determined by the Compensation Committee,
provided that the exercise price per share of an option may not be less
than the fair market value of a share of SHS common stock on the date of
grant. The maximum term of any stock option will be years from the
date of grant. The Compensation Committee is to determine the extent to
which an option will become and/or remain exercisable in the event of
termination of employment or service of a participant under various
circumstances, including retirement, death or disability, subject to
certain limitations for incentive stock options. An option may be
exercised in whole or in part at any time during the term thereof by
written notice to SHS, together with payment of the aggregate exercise
price of the option. In addition to the exercise price, the participant
must pay SHS in cash or, at the Compensation Committee's discretion, in
SHS common stock, the full amount of all applicable income tax and
employment tax amounts required to be withheld in connection with the
exercise of the option.

. Stock Appreciation Rights. A stock appreciation right may be granted
either in tandem with an option or without a related option. A stock
appreciation right entitles the holder, upon exercise, to receive a
payment based on the difference between the base price of the stock
appreciation right (which may not be less than the fair market value of
a share of SHS common stock on the date of grant) and the fair market
value of a share of SHS common stock on the date of exercise, multiplied
by the number of shares as to which such stock appreciation right is
being exercised. The maximum term of a stock appreciation right will be
years from the date of grant. Stock appreciation rights are payable,
in the discretion of the Compensation Committee, in cash, in shares of
SHS common stock, or in a combination of cash and shares of SHS common
stock.

. Restricted Stock Awards. An award of restricted stock represents shares
of SHS common stock that are issued subject to such restrictions on
transfer and incidents of ownership, and such forfeiture conditions, as
the Compensation Committee deems appropriate. The restrictions imposed
upon an award of restricted stock will lapse in accordance with the
vesting requirements specified by the Compensation Committee in the
award agreement. Such vesting requirements may be based on the continued
employment of the participant for a specified time period or on the
attainment of specified business goals or performance criteria
established by the Compensation Committee. The Compensation Committee
may, in connection with an award of restricted stock, require the
payment of a specified purchase price. Subject to the transfer
restrictions and forfeiture restrictions relating to the restricted
stock award, the participant will have the rights of a stockholder of
SHS, including all

50
<PAGE>

voting and dividend rights, during the restriction period, unless the
Compensation Committee determines otherwise at the time of the grant.
The maximum number of shares of common stock that may be subject to a
restricted stock award granted to a participant during any one calendar
year shall be .

Change-In-Control. The Compensation Committee may, in an award agreement,
provide for the effect of a change-in-control (as defined in the 1999 Stock
Incentive Plan) on the award. Such provisions may include the acceleration of
an award's vesting or extension of the time for exercise, the elimination or
modification of performance or other conditions, the cash settlement of an
award or other adjustments that the Compensation Committee considers
appropriate.

Employee Stock Purchase Plan

Reservation of Shares. Under the Employee Stock Purchase Plan, shares
of SHS common stock will be reserved for issuance pursuant to all rights
granted under the plan. The shares of SHS common stock to be issued will be
made available from authorized but unissued shares of SHS common stock or
issued shares that have been reacquired by SHS. To the extent that any right to
purchase SHS common stock granted under the plan is forfeited, cancelled, or
otherwise terminated, the shares of SHS common stock covered thereunder will no
longer be charged against the maximum share limitation and may again be made
subject to rights granted under the plan.

Duration. The Employee Stock Purchase Plan will have a term of years,
subject to earlier termination or amendment by SHS's Board of Directors.

Administration. The Employee Stock Purchase Plan will be administered by the
Compensation Committee. Subject to limitations to be set forth in the plan, the
Compensation Committee will have the authority to determine the persons to whom
rights are granted, the time at which rights will be granted, the number of
shares that may be purchased under a right, the date or period during which
such right may be exercised and all other terms of the right. With the consent
of the affected participant, the Compensation Committee will have the authority
to cancel and replace outstanding rights previously granted with new rights for
the same or a different number of shares and to amend the terms of any
outstanding right.

Eligibility. All executive employees of SHS and its subsidiaries located in
the United States will be eligible to receive rights under the Employee Stock
Purchase Plan. Employees must hold common stock purchased under this Plan for
at least . An employee is not eligible for the grant of any rights under
this Plan if the employee would own, directly or indirectly, stock possessing
5% or more of the total combined voting power or value of all classes of stock
of SHS. The employee may have deductions made from his or her compensation
which will be deposited into the employee's stock purchase account. On the
exercise date, the entire amount in the employee's stock purchase account will
be applied to the purchase of shares of SHS common stock at a price that is %
of the market value of the stock on the exercise date. An employee may not
purchase more than shares of SHS common stock on any one exercise date, or
more than $ worth of common stock during any calendar year.

Exercise of Rights. A right will be exercised by written notice to SHS on or
prior to a specified exercise date.

Treatment of Snyder Options and Other Benefits Following the Distribution

As part of the distribution, outstanding stock option and other incentive
awards granted under Snyder's stock plan will be cancelled and replaced with
awards under SHS's 1999 Stock Incentive Plan. The replacement awards granted
under the 1999 Stock Incentive Plan will maintain the economic position of the
holders, will not increase the aggregate intrinsic value of the outstanding
Snyder options that were cancelled, and the ratio of the exercise price per
option to the market value per share will not be changed. Snyder

51
<PAGE>

employee stock options and other incentive awards held by employees of Snyder
will be retained by employees of Snyder and their exercise prices will be
adjusted in the same manner to reflect the distribution.

Employment Agreements

Eran Broshy. On June 14, 1999, Snyder retained the services of Eran Broshy as
President of Snyder's healthcare group. Under the terms of Mr. Broshy's
employment agreement, he will initially receive an annual base salary of
$425,000. He is also eligible for an annual bonus award based on certain
performance measures, which may not exceed $125,000.

Under his employment agreement, Mr. Broshy was granted non-qualified options
to purchase an aggregate of $4,000,000 of SHS common stock at fair market
value. Mr. Broshy's options vest at the rate of 25% per year on each
anniversary of the grant date, provided he is still employed by SHS on the
applicable vesting date. Mr. Broshy's employment agreement also provides for a
grant of an aggregate of $2,500,000 in restricted SHS common stock, 20% of
which will vest on the distribution date and the remaining 80% vesting in equal
increments over the next four years, provided he is still employed by SHS on
the applicable vesting date. The restricted stock grant provided for in his
employment agreement will prohibit Mr. Broshy from transferring any of his SHS
common stock for a period of four years after the distribution date. The
agreement provides that upon a "change in control" of SHS, the vesting of both
the stock options and restricted stock will accelerate so that Mr. Broshy's
options and restricted stock are fully vested. For purposes of his employment
agreement, "change in control" means any sale, transfer or other disposition of
all or substantially all of the assets of SHS or the consummation of a merger
or consolidation of SHS which results in the SHS stockholders immediately prior
to such transaction owning, in the aggregate, less than a majority of the
surviving entity. Furthermore, Mr. Broshy's employment agreement provides that
he may borrow up to $500,000 from SHS exclusively for the purchase of SHS
common stock.

Robert Brown, Ph.D. Health Products Research, Inc., a subsidiary of Snyder,
entered into an employment agreement with Dr. Brown on February 13, 1998. Dr.
Brown's initial base salary under his employment agreement is $210,000. Dr.
Brown's employment agreement also provides for a grant of stock options to
purchase 100,000 shares of Snyder common stock, vesting over a four-year
period. In the event of Dr. Brown's termination without cause, voluntary
termination for "good reason," or his termination pursuant to sale or transfer
of Health Products Research, Inc., Dr. Brown is entitled to a severance payment
equal to one-half of his annual base salary.

R. Jeremy Stone, M.D. Halliday Jones Sales Limited, a subsidiary of Snyder,
entered into an employment agreement with Dr. Stone on October 15, 1998. Dr.
Stone's initial base salary under his employment agreement is (Pounds)150,000.
Dr. Stone's employment agreement also provides for a grant of stock options to
purchase 100,000 shares of Snyder common stock, vesting over a four-year
period. In the event of Dr. Stone's termination without cause, Dr. Stone is
entitled to a severance payment equal to one-half of his annual base salary or
the remaining term of his employment agreement, whichever is less.

Allan Avery. GEM Communications, Inc., a subsidiary of Snyder, entered into
an employment agreement with Mr. Avery on November 25, 1997. Mr. Avery's
initial base salary under his employment agreement is $200,000. Mr. Avery's
employment agreement also provides for a grant of stock options to purchase
50,000 shares of Snyder common stock, vesting over a four-year period. In the
event of Mr. Avery's termination without cause or the sale or transfer of GEM
Communications, Inc., Mr. Avery is entitled to a severance payment equal to
one-half of his annual base salary.

William C. Pollock. Healthcare Promotions, LLC, a subsidiary of Snyder,
entered into an employment agreement with Mr. Pollock on February 13, 1998. Mr.
Pollock's initial base salary under his employment agreement is $240,000. Mr.
Pollock's employment agreement also provides for a grant of stock options to
purchase 75,000 shares of Snyder common stock, vesting over a four-year period.
In the event of Mr. Pollock's termination without cause or the sale or transfer
of Healthcare Promotions, LLC, Dr. Brown is entitled to a severance payment
equal to one-half of his annual base salary.

52
<PAGE>

Each of the employment agreements described above contains a non-competition
commitment during the term of employment and for a period of 12 months after
termination of employment. Additionally, each employment agreement contains a
non-solicitation provision and provides for assignment by the employee to his
employer of any work products developed by him during the term of his
employment.

SHS will assume the obligations of Snyder, Health Products Research, Inc.,
Halliday Jones Sales Limited, GEM Communications, Inc. and Healthcare
Promotions, LLC, respectively, under these employment contracts in connection
with the consummation of the distribution.

53
<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the projected beneficial ownership of SHS
common stock immediately following the distribution date by each of SHS's
directors, its Chief Executive Officer and the executive officers who were
SHS's four most highly compensated executive officers in fiscal 1998 and all
directors and executive officers as a group, based upon information available
to Snyder concerning ownership of shares of Snyder common stock at ,
1999. The projections do not take into account (i) any shares of common stock
that may be issued with respect to shares of Snyder common stock acquired
pursuant to the exercise of options to purchase shares of Snyder common stock
previously granted under Snyder compensation programs but not exercised as of
, 1999 or (ii) any shares of restricted SHS common stock or shares of
common stock underlying stock options that may be granted to SHS's executive
officers and other key employees subsequent to the distribution date. See
"Executive Compensation--SHS Compensation and Benefit Plans--1999 Stock
Incentive Plan."

<TABLE>
<CAPTION>
Number of Shares Projected % of Shares
Name to be Beneficially Owned Outstanding
- ---- -------------------------- -----------
<S> <C> <C>
Daniel M. Snyder........................
Michele D. Snyder.......................
Mortimer B. Zuckerman...................
Fred Drasner............................
Eran Broshy.............................
Dr. Robert Brown........................
R. Jeremy Stone.........................
Allan Avery.............................
William C. Pollock......................
All directors and executive officers as
a group ( persons)...................
</TABLE>

Based upon information available to Snyder concerning the ownership of shares
of Snyder common stock at , 1999, no person, other than those listed in
the table above, is projected to own beneficially more than 5% of the
outstanding SHS common stock on the distribution date except as follows:

<TABLE>
<CAPTION>
Shares of
SHS Common
Stock to be
Received
Name and Address of in the
Beneficial Owner Distribution Percent of Class*
------------------- ------------ -----------------
<S> <C> <C>
Ark Asset Management Co., Inc. ............ 10.5%
Putnam Investments, Inc. .................. 12.1%
</TABLE>
- --------
* These percentages are based on shares of Snyder common stock reported as
being beneficially owned in statements on Schedule 13G by the respective
beneficial owner.

54
<PAGE>

DESCRIPTION OF CAPITAL STOCK

Authorized Capital Stock

The total number of shares of all classes of stock that SHS presently has
authority to issue is 1,000 shares of SHS common stock. Under the certificate
that will be in effect on the distribution date, SHS will have authority to
issue a total of shares of all classes of stock, of which
may be shares of preferred stock and may be shares of
common stock.

Based on the number of shares of Snyder common stock outstanding as of
, 1999 and the distribution ratio, it is expected that
shares of SHS common stock will be distributed to Snyder stockholders in the
distribution. All the shares of SHS common stock to be distributed to Snyder
stockholders in the distribution will be fully paid and non-assessable. The SHS
common stock to be distributed will constitute all the shares of capital stock
of SHS that will be outstanding immediately after the distribution.

SHS Common Stock

Holders of SHS common stock are entitled to one vote for each share on all
matters voted on by stockholders. Holders of SHS common stock do not have
cumulative voting rights in the election of directors. The first annual meeting
of stockholders is expected to be held during 2000.

Holders of SHS common stock do not have subscription, redemption or
conversion privileges. Subject to the preferences or other rights of any
preferred stock that may be issued from time to time, holders of SHS common
stock are entitled to participate ratably in dividends on SHS common stock as
declared by the SHS Board of Directors. Holders of SHS common stock are
entitled to share ratably in all assets available for distribution to
stockholders in the event of liquidation or dissolution of SHS, subject to
distribution of the preferential amount, if any, to be distributed to holders
of preferred stock.

Preferred Stock

SHS's certificate of incorporation that will be in effect on the distribution
date will authorize the SHS Board of Directors, without any vote or action by
the holders of SHS common stock, to issue up to shares of preferred
stock from time to time in one or more series. The SHS Board of Directors is
authorized to determine the number of shares and designation of any series of
preferred stock and the dividend rights, dividend rate, conversion rights and
terms, voting rights (full or limited, if any), redemption rights and terms,
liquidation preferences and sinking fund terms of any series of preferred
stock. Issuances of preferred stock would be subject to the applicable rules of
the Nasdaq National Market or other organizations on whose systems the stock of
SHS may then be quoted or listed. Depending upon the terms of preferred stock
established by SHS Board of Directors, any or all series of preferred stock
could have preference over SHS common stock with respect to dividends and other
distributions and upon liquidation of SHS. Issuance of any such shares with
voting powers, or issuance of additional shares of SHS common stock, would
dilute the voting power of the outstanding SHS common stock. SHS has no present
plans to issue any preferred stock.

No Preemptive Rights

No holder of any capital stock of SHS authorized at the distribution date
will have any preemptive right to subscribe for or purchase any securities of
any class or kind of SHS.

Transfer Agent and Registrar

American Stock Transfer and Trust Company will be the transfer agent and
registrar for SHS common stock commencing upon the distribution date.

55
<PAGE>

PURPOSES AND EFFECTS OF CERTAIN PROVISIONS OF DELAWARE LAW, SHS'S CERTIFICATE
OF INCORPORATION AND BY-LAWS

The following discussion concerns certain provisions of Delaware law, the SHS
certificate of incorporation and our by-laws that could be viewed as having the
effect of discouraging an attempt to obtain control of SHS.

Delaware Law

Section 203 of the General Corporation Law. Under certain circumstances,
Section 203 of the Delaware General Corporation Law limits the ability of an
"interested stockholder" to effect various business combinations with SHS for a
three-year period following the time that a stockholder became an interested
stockholder. An "interested stockholder" is defined as a holder of more than
15% of the outstanding voting stock.

An interested stockholder may engage in a business combination transaction
with SHS within the three-year period only if:

. SHS's Board of Directors approved the transaction before the stockholder
became an interested stockholder or approved the transaction in which
the stockholder became an interested stockholder;

. the interested stockholder acquired at least 85% of the voting stock in
the transaction in which it became an interested stockholder; or

. SHS's Board of Directors and the holders of shares entitled to cast two-
thirds of the votes entitled to be cast by all of the outstanding voting
shares held by all disinterested stockholders approve the transaction.

Special Meetings. Under Delaware law, unless the certificate of incorporation
or the by-laws provide otherwise, stockholders are not permitted to call a
special meeting of the stockholders. SHS's certificate of incorporation and by-
laws do not permit stockholders to call a special meeting.

Certificate of Incorporation and By-Laws

Authorized Shares. The certificate of incorporation will provide that SHS may
from time to time issue shares of preferred stock in one or more series, the
terms of which will be determined by SHS's Board of Directors, and common
stock. SHS will not solicit approval of our stockholders unless SHS's Board of
Directors believes that approval is advisable or is required by Nasdaq National
Market regulations or Delaware law. This could enable SHS's Board of Directors
to issue shares to persons friendly to current management which would render
more difficult or discourage an attempt to obtain control of SHS by means of a
merger, tender offer, proxy contest or otherwise and protect the continuity of
our management. These additional shares also could be used to dilute the stock
ownership of persons seeking to obtain control of our company.

56
<PAGE>

LIMITATION ON LIABILITY AND INDEMNIFICATION
OF OFFICERS AND DIRECTORS

Limitation on Liability of Directors

Section 145 of the Delaware General Corporation Law permits the
indemnification of directors, officers, employee and agents of a Delaware
corporation. SHS's certificate of incorporation and by-laws provide that SHS
shall indemnify its directors and officers to the fullest extent permitted by
the Delaware General Corporation Law. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers or person controlling SHS pursuant to the foregoing provisions, the
opinion of the Securities and Exchange Commission is that such indemnification
is against public policy as expressed in the Securities Act and is therefore
unenforceable.

As permitted by the Delaware General Corporation Law, SHS's certificate of
incorporation also limits the liability of directors of SHS for damages in
derivative and third party lawsuits for breach of a director's fiduciary duty
except for liability:

. for any breach of the director's duty of loyalty to SHS or its
stockholders;

. for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;

. for unlawful payments of dividends or unlawful stock purchases or
redemptions as provided in Section 174 of the Delaware General
Corporation Law; or

. for any transaction for which the director derived improper personal
benefit.

The limitation of liability applies only to monetary damages and, presumably,
would not affect the availability of equitable remedies such as injunction or
recission. The limitation of liability applies only to the acts or omission of
directors as directors and does not apply to any such act or omission as an
officer of SHS or to any liabilities imposed under federal securities law.

Indemnification and Insurance

SHS intends to obtain directors' and officers' insurance providing
indemnification for certain of SHS's directors, officers, affiliates, partners
and employees for certain liabilities.

SHS's by-laws, among other things, indemnify SHS's directors and executive
officers for certain expenses, including attorney's fees, judgments, fines and
settlement amounts incurred by any such person in any action or proceeding,
including any action by or in the right of SHS, arising out of such person's
services as a director or executive officer of SHS, any subsidiary of SHS or
any other company or enterprise to which the person provides services at the
request of SHS. We believe that these provisions are necessary to attract and
retain qualified directors and executive officers.

At present, there are no pending litigation or proceeding involving any
director, officer, employee or agent of SHS where indemnification is expected
to be required or permitted. We are not aware of any threatened litigation or
proceeding that might result in a claim for such indemnification.

57
<PAGE>

ADDITIONAL INFORMATION

We have filed with the Securities and Exchange Commission the registration
statement under the Exchange Act with respect to SHS common stock being
received by Snyder stockholders in the distribution. This information statement
does not contain all of the information set forth in the registration statement
and the exhibits thereto, to which reference is hereby made. Statements made in
this information statement as to the contents of any contract, agreement or
other documents referred to herein are not necessarily complete. With respect
to each such contract, agreement or to other documents filed as an exhibit to
the registration statement, reference is made to such exhibit for more complete
description of the matter involved, and each such statement shall be deemed
qualified in its entirety by such reference. The registration statement and the
exhibits thereto filed by us with the Securities and Exchange Commission may be
inspected at the public reference facilities of the Securities and Exchange
Commission listed below.

After the distribution, SHS will be subject to the information requirements
of the Exchange Act, and in accordance therewith will file reports, proxy
statements and other information with the Securities and Exchange Commission.
Such reports, proxy statements and other information can be inspected and
copied at the public reference facilities maintained by the Securities and
Exchange Commission at its principal offices at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at its regional offices at Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7
World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material may be obtained at prescribed rates from the Public Reference Section
of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. Such
material may also be accessed electronically by means of the Commission's home
page on the Internet at http://www.sec.gov. Application has been made to list
the shares of SHS common stock on the Nasdaq National Market and, if and when
such shares of SHS common stock commence trading on the Nasdaq National Market,
such reports, proxy statements and other information concerning the Company
will be available for inspection at 1735 K Street, N.W., Washington, D.C.
20006-1500.

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

We intend to furnish our stockholders with annual reports containing
consolidated financial statements (beginning with fiscal year 1999) audited by
independent accountants.

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

You should rely only on the information contained in this information
statement and other documents referred to in this information statement. Snyder
and SHS have not authorized anyone to provide you with information that is
different.

58
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Snyder Healthcare Services, Inc.
Combined Financial Statements

Report of Independent Public Accountants.................................. F-2
Combined Balance Sheet as of December 31, 1998 and 1997 and March 31, 1999
(unaudited).............................................................. F-3
Combined Statement of Income, for the years ended December 31, 1998, 1997
and 1996 and the three months ended March 31, 1999 (unaudited) and 1998
(unaudited).............................................................. F-4
Combined Statement of Cash Flows for the years ended December 31, 1998,
1997 and 1996 and the three months ended March 31, 1999 (unaudited) and
1998 (unaudited)......................................................... F-5
Notes to Combined Financial Statements.................................... F-6

CLI Pharma S.A.
Consolidated Financial Statements of Acquired Business

Report of Independent Public Accountants.................................. F-20
Consolidated Balance Sheet as of December 31, 1997........................ F-21
Consolidated Statement of Income for the year ended December 31, 1997..... F-22
Consolidated Statement of Equity for the year ended December 31, 1997..... F-23
Consolidated Statement of Cash Flows for the year ended December 31, 1997. F-24
Notes to Financial Statements............................................. F-25
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of Snyder Communications, Inc.:

We have audited the accompanying combined balance sheets of Snyder Healthcare
Services, Inc. (the "Company"), as defined in Note 1 to the combined financial
statements, as of December 31, 1998 and 1997, and the related combined
statements of income and cash flows for each of the years in the three year
period ended December 31, 1998. These combined financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these combined financial statements based on our audits.

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

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Snyder Healthcare
Services, Inc. as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the years in the three year period
ended December 31, 1998, in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

Washington, D.C.
June 22, 1999

F-2
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.
(See Note 1)

COMBINED BALANCE SHEET
(in thousands)

<TABLE>
<CAPTION>
March 31, December 31,
----------- -----------------
1999 1998 1997
----------- -------- --------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents........................... $ 24,288 $ 25,664 $ 18,040
Marketable securities.......................... -- -- 1,108
Accounts receivable, net of allowance for
doubtful accounts of $2,473, $2,971 and $3,924
at March 31, 1999, December 31, 1998 and 1997,
respectively.................................. 50,700 43,521 29,331
Unbilled services.............................. 24,183 15,212 6,769
Current portion of deferred tax asset.......... 419 683 852
Other current assets........................... 11,111 10,369 7,141
-------- -------- --------
Total current assets......................... 110,701 95,449 63,241
-------- -------- --------
Property and equipment, net...................... 11,754 10,028 4,880
Goodwill and other intangible assets, net........ 97,335 80,728 26,283
Deferred tax asset............................... 3,733 3,414 4,569
Deposits and other assets........................ 728 4,025 1,974
-------- -------- --------
Total assets................................. $224,251 $193,644 $100,947
======== ======== ========
LIABILITIES AND INVESTMENTS
AND ADVANCES FROM SNYDER
Current liabilities:
Lines of credit................................ $ 633 $ 198 $ 22,875
Current maturities of long-term debt........... -- -- 137
Accrued payroll................................ 13,093 13,989 14,278
Accounts payable............................... 7,280 5,791 5,771
Accrued expenses............................... 39,297 40,613 29,225
Client advances................................ 7,240 1,965 --
Unearned revenue............................... 9,564 8,446 14,125
-------- -------- --------
Total current liabilities.................... 77,107 71,002 86,411
-------- -------- --------
Related party borrowings......................... -- -- 457
Long-term debt................................... 1,336 1,473 3,697
Other liabilities................................ 3 1,442 11
Commitments and contingencies
Investments and advances from Snyder............. 145,805 119,727 10,371
-------- -------- --------
Total liabilities and investments and
advances from Snyder........................ $224,251 $193,644 $100,947
======== ======== ========
</TABLE>

The accompanying notes are an integral part of this combined balance sheet.

F-3
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.
(See Note 1)

COMBINED STATEMENT OF INCOME
(in thousands, except per share amounts)

<TABLE>
<CAPTION>
For the
Three Months Ended For the Years Ended
March 31, December 31,
-------------------- ----------------------------
1999 1998 1998 1997 1996
--------- --------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues................... $ 86,939 $ 67,356 $321,500 $208,967 $144,704
Operating expenses:
Cost of services......... 66,856 49,163 236,047 156,346 104,922
Selling, general and
administrative expenses. 10,346 8,415 43,029 32,787 25,960
Compensation to
stockholders............ -- 236 742 15,638 12,340
Recapitalization costs... -- -- -- 1,889 --
Acquisition and related
costs................... 1,576 11,356 26,922 8,042 --
--------- --------- -------- -------- --------
Income (loss) from
operations................ 8,161 (1,814) 14,760 (5,735) 1,482
Interest expense........... (41) (525) (2,315) (1,617) (691)
Investment income.......... 278 242 1,850 568 796
--------- --------- -------- -------- --------
Income (loss) from
operations before income
taxes..................... 8,398 (2,097) 14,295 (6,784) 1,587
Income tax provision....... (3,309) (1,955) (12,849) (1,934) (1,504)
--------- --------- -------- -------- --------
Net income (loss).......... $ 5,089 $ (4,052) $ 1,446 $ (8,718) $ 83
========= ========= ======== ======== ========
Pro forma net income (loss)
per share data
(unaudited):
Pro forma Historical net
income (loss) per share
(See Note 1)
Basic and diluted net
income (loss) per share. $ 0.13 $ (0.11) $ 0.04 $ (0.23) $ --
========= ========= ======== ======== ========
Pro forma adjusted net
income (loss) per share
(unaudited) (See Notes 1
and 3)
Basic and diluted net
income (loss) per share. $ 0.13 $ (0.11) $ 0.04 $ (0.28) $ (0.07)
========= ========= ======== ======== ========
Shares used in computing
net income (loss) per
share................... 37,790 37,790 37,790 37,790 37,790
========= ========= ======== ======== ========
</TABLE>

The accompanying notes are an integral part of this combined statement of
income.

F-4
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.
(See Note 1)

COMBINED STATEMENT OF CASH FLOWS
(in thousands)

<TABLE>
<CAPTION>
For the
Three Months For the Years Ended
Ended March 31, December 31,
------------------ -------------------------
1999 1998 1998 1997 1996
-------- -------- ------- ------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income (loss).......... $ 5,089 $ (4,052) $ 1,446 $(8,718) $ 83
Adjustments to reconcile
net income (loss) to net
cash provided by (used
in) operating activities:
Depreciation and
amortization............ 1,766 980 5,359 2,169 1,151
Noncash charge from ac-
celerated vesting of ac-
quired subsidiary
options................. -- -- 2,173 -- --
Deferred taxes........... (55) 2,333 1,324 (3,914) (213)
(Gain) loss on disposal
of assets............... 139 8 151 371 (168)
Other noncash amounts.... -- 17 126 (934) (445)
Changes in assets and
liabilities:
Accounts receivable, net. (5,902) (6,259) (1,040) (7,043) (573)
Unbilled services........ (8,805) (662) (8,443) (3,074) (2,110)
Deposits and other
assets.................. 3,298 813 (3,533) (1,066) 238
Other current assets..... (483) 298 (813) 1,314 1,314
Accrued payroll, accounts
payable and accrued
expenses................ (4,997) 5,547 8,599 16,385 4,896
Client advances.......... 3,307 -- 1,965 -- --
Unearned revenue......... 1,077 (1,962) (8,535) 2,586 (3,255)
-------- -------- ------- ------- -------
Net cash provided by
(used in) operating
activities............ (5,566) (2,939) (1,221) (1,924) 918
-------- -------- ------- ------- -------
Cash flows from investing
activities:
Cash on hand at acquired
businesses................ 2,917 6,083 6,083 452 --
Purchase of subsidiaries... (1,135) (4,971) (10,386) -- --
Purchase of property and
equipment................. (2,072) (1,260) (4,916) (2,127) (915)
Proceeds from sale of
equipment................. -- -- 780 184 246
Net sales (purchases) of
marketable securities..... -- 236 1,262 2,274 (159)
Purchase of license
agreements................ (23) (503) (13) (4,359) (871)
-------- -------- ------- ------- -------
Net cash used in
investing activities.. (313) (415) (7,190) (3,576) (1,699)
-------- -------- ------- ------- -------
Cash flows from financing
activities:
Net proceeds (repayment)
of long-term debt......... (1,570) (2,167) (4,210) (1,838) (1,038)
Debt issuance costs........ -- -- -- -- (25)
Proceeds from mandatorily
redeemable preferred
stock..................... -- -- -- -- 2,147
Redemption of mandatorily
redeemable preferred
stock..................... -- -- -- (2,147) --
Net borrowings
(repayments) on lines of
credit.................... 435 (1,575) (22,707) 20,603 (1,842)
Loans provided by related
parties................... -- -- -- 10,000 --
Payment of related party
loans..................... -- -- -- (10,000) --
Investments and advances
from Snyder............... 5,754 5,780 42,753 (167) (7,998)
-------- -------- ------- ------- -------
Net cash provided by
(used in) financing
activities............ 4,619 2,038 15,836 16,451 (8,756)
-------- -------- ------- ------- -------
Effect of exchange rate
changes.................... (116) (349) 199 (177) 76
Net increase (decrease)in
cash and equivalents....... (1,376) (1,665) 7,624 10,774 (9,461)
Cash and equivalents,
beginning of period........ 25,664 18,040 18,040 7,266 16,727
-------- -------- ------- ------- -------
Cash and equivalents, end of
period..................... $ 24,288 $ 16,375 $25,664 $18,040 $ 7,266
======== ======== ======= ======= =======
Disclosure of supplemental
cash flow information:
Cash paid for interest..... $ 156 $ 368 $ 1,526 $ 899 $ 480
Cash paid for income
taxes..................... 1,171 355 2,542 1,550 244
Disclosure of noncash activ-
ities:
Businesses acquired with
Snyder stock.............. $ 16,459 $ 51,358 $64,546 $13,320 $ --
</TABLE>

The accompanying notes are an integral part of this combined statement of cash
flows.

F-5
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

(Information as of March 31, 1999 and for the three months ended March 31, 1999
and March 31, 1998 is unaudited)

1. Organization, Basis of Presentation and Business:

Organization

Snyder Communications, Inc. ("Snyder"), a Delaware corporation, was
incorporated on June 25, 1996, to continue the business operations of
Collegiate Marketing and Communications, L.P. Snyder completed an initial
public offering of its common stock on September 24, 1996.

Snyder provides direct marketing and communications services and Internet
professional services to its clients.

On June 22, 1999, the Board of Directors of Snyder approved a plan to effect
the distribution (the "Distribution") of Snyder's healthcare marketing services
business to existing stockholders. Snyder intends to consummate the
Distribution in the third quarter of 1999 through a special dividend of one
share of common stock of a newly formed subsidiary, Snyder Healthcare Services,
Inc. (as defined below, the "Company"), for every two shares of existing common
stock of Snyder.

Basis of Presentation

Subsequent to the Distribution, operations of Snyder Healthcare Services,
Inc. will consist principally of the healthcare sales, healthcare market
research and strategic planning, and healthcare educational communications
services formerly conducted by the healthcare marketing services operating
group of Snyder.

The combined financial statements present the financial position, results of
operations and cash flows of the Company as if it were formed as a separate
entity of Snyder for all periods presented. Snyder's historical basis in the
assets and liabilities of the Company have been carried over to the combined
financial statements. All expenses reflected in the combined financial
statements are costs specifically identified to the Company. It is not
practicable to estimate costs that would have been incurred by the Company if
it had been operated on a stand-alone basis.

Throughout 1998 and 1997, acquisitions were completed by the healthcare
services operating group of Snyder that were accounted for as poolings of
interests for financial reporting purposes. During 1999, 1998 and 1997, several
additional acquisitions were made that have been accounted for as purchase
business combinations. The companies with which Snyder has entered into mergers
accounted for as poolings of interests for financial reporting purposes will be
collectively referred to as the "Pooled Entities," and their mergers will be
referred to herein as the "Acquisitions." The accompanying combined financial
statements have been retroactively restated to reflect the combined financial
position and combined results of operations and cash flows of the Company and
the Pooled Entities, after elimination of all significant intercompany
transactions, for all periods presented, giving effect to the Acquisitions as
if they had occurred at the beginning of the earliest period presented.

Changes in the investments and advances from Snyder represent the net income
(loss) of the Company, the comprehensive income (loss) of the Company, the net
change in cash transferred between the Company and Snyder (or previous owners
with respect to the Pooled Entities prior to their merger with Snyder) and the
effect of businesses acquired by Snyder in purchase transactions and
contributed to Snyder Healthcare Services, Inc.

F-6
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

An analysis of the investments and advances from Snyder for each of the three
years ended December 31, 1998 and the three months ended March 31, 1999, is as
follows (in thousands):

<TABLE>
<S> <C>
Balance, December 31, 1995......................................... $ 13,591
Net income....................................................... 83
Comprehensive income............................................. 108
Cash transfers to Snyder, net.................................... (9,085)
--------
Balance, December 31, 1996......................................... 4,697
--------
Net loss......................................................... (8,718)
Comprehensive income............................................. 152
Noncash transfers from Snyder.................................... 13,320
Cash transfers from Snyder, net.................................. 920
--------
Balance, December 31, 1997......................................... 10,371
--------
Net income....................................................... 1,446
Comprehensive income............................................. 611
Noncash transfers from Snyder.................................... 64,546
Cash transfers from Snyder, net.................................. 42,753
--------
Balance, December 31, 1998......................................... 119,727
--------
Net income (unaudited)........................................... 5,089
Comprehensive loss (unaudited)................................... (1,224)
Noncash transfers from Snyder (unaudited)........................ 16,459
Cash transfers from Snyder, net (unaudited)...................... 5,754
--------
Balance, March 31, 1999 (unaudited)................................ $145,805
========
</TABLE>

Business

The Company provides integrated marketing services for its clients, primarily
pharmaceutical companies. The Company's operations are conducted throughout the
United States ("U.S."), the United Kingdom ("U.K."), France, Germany, Hungary
and the Netherlands.

SHS's services are designed to establish and monitor strategic marketing
plans, to provide face-to-face interaction with physicians and to conduct
educational research and communication services. Snyder created the business
conducted by SHS in January 1997 in a merger transaction with a U.S. provider
of pharmaceutical sales and marketing services. During 1998 and 1997, Snyder
issued 6,475,105 and 4,035,184 shares, respectively, in pooling of interests
transactions with companies in the healthcare marketing services industry. Of
the total shares issued in pooling of interests transactions, 1,318,798 were to
Health Products Research, 6,008,210 were to companies in SHS's Contract Sales
Group, and 3,183,281 were to companies in SHS's Healthcare Communications
Group. The Contract Sales Group includes MMD, Inc., PharmFlex, Inc., Rapid
Deployment Group Limited, Publimed Promotions S.A. and MKM Marketinginstitut
GmbH. The Healthcare Communications Group includes GEM Communications, Inc. and
Clinical Communications Group, Inc. We further expanded the size and geographic
presence of our Contract Sales Group with the purchase of Halliday Jone Sales
Ltd. which was valued at $19.4 million in August 1997 and with the purchases of
Healthcare Promotions, LLC and CLI Pharma S.A. with a combined value of $54.4
million in the first quarter of 1998. We also increased the scope of services
offered by the Healthcare Communications Group with the purchase of PromoTech
Research Associates, Inc. which was valued at $18.0 million in March 1999.

Health Products Research designs and monitors product launches and sales
strategies with our proprietary programs to maximize asset utilization and
return on investment for pharmaceutical and other life sciences companies. The
Healthcare Communications Group provides educational programs to physicians and
other healthcare professionals. The Contract Sales Group implements and
executes outsourced sales programs for pharmaceutical and other life sciences
products. Most of SHS's largest clients utilize the services of more than one
of our operating groups.

F-7
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

The following details revenues and net income (loss) for each of the years
ended December 31, 1998, 1997 and 1996 as well as the three months ended March
31, 1999 and March 31, 1998 of the Company and the Pooled Entities through the
dates of their respective Acquisitions:

<TABLE>
<CAPTION>
For the Three
Months Ended For the Years Ended
March 31, December 31,
--------------- ----------------------------
1999 1998 1998 1997 1996
------- ------- -------- -------- --------
(in thousands)
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues:
The Company..................... $86,939 $44,191 $270,323 $ 60,124 $ --
Pooled Entities................. -- 23,165 51,177 148,843 144,704
------- ------- -------- -------- --------
$86,939 $67,356 $321,500 $208,967 $144,704
======= ======= ======== ======== ========
Net Income (loss):
The Company..................... $ 5,089 $(1,469) $ 5,933 $ 1,987 $ --
Pooled Entities................. -- (2,583) (4,487) (10,705) 83
------- ------- -------- -------- --------
$ 5,089 $(4,052) $ 1,446 $ (8,718) $ 83
======= ======= ======== ======== ========
</TABLE>

Unaudited Pro Forma Information

During the three months ended March 31, 1999, the combined Company recorded
$1.6 million of nonrecurring costs, consisting of acquisition and related
costs. Combined net income adjusted to exclude nonrecurring acquisition and
related costs was $6.3 million for the three months ended March 31, 1999.

During the three months ended March 31, 1998, the combined Company recorded
$11.4 million of nonrecurring acquisition and related costs. The Pooled
Entities recorded $0.2 million of nonrecurring compensation to stockholders
(see Note 10). Combined net income adjusted to exclude nonrecurring acquisition
and related costs and compensation to stockholders was $5.6 million for the
three months ended March 31, 1998.

During the year ended December 31, 1998, the combined Company recorded $27.0
million of nonrecurring acquisition and related costs. The Pooled Entities
recorded $0.7 million of nonrecurring compensation to stockholders. Combined
net income adjusted to exclude nonrecurring acquisition and related costs and
compensation to stockholders was $24.7 million for the year ended December 31,
1998.

During the year ended December 31, 1997, the combined Company recorded $8.0
million of nonrecurring acquisition and related costs. The Pooled Entities
recorded $17.6 million in nonrecurring compensation to stockholders and
nonrecurring recapitalization costs. Combined net income adjusted to exclude
nonrecurring acquisition and related costs, recapitalization costs, and
compensation to stockholders was $9.6 million for the year ended December 31,
1997.

F-8
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

During the year ended December 31, 1996, the Pooled Entities recorded $12.3
million in nonrecurring compensation to stockholders. Combined net income
adjusted to exclude compensation to stockholders was $7.4 million for the year
ended December 31, 1996.

During 1998, the Company completed purchase business combinations, including
CLI Pharma (March 25, 1998) and HCP (February 13, 1998), for total
consideration paid of approximately $64.0 million (1,211,029 shares of Snyder
common stock and $4.3 million in net cash). Based upon an allocation of
purchase consideration, these purchase business combinations have resulted in
additional goodwill of approximately $55.7 million. During 1997, the Company
completed the acquisition of HJ, and the total consideration paid, including
the repayment of assumed debt, was $19.4 million and consisted of 425,478
shares of Snyder common stock and $7.4 million in cash. The following table
presents pro forma financial information as if the 1998 purchases of HCP and
CLI Pharma and 1997 purchase of HJ had been consummated at the beginning of
each of the periods presented and all of the Company's operations had been
taxed as a C corporation.

<TABLE>
<CAPTION>
For the Three For the Years
Months Ended Ended December
March 31, 31,
--------------- -----------------
1999 1998 1998 1997
------- ------- -------- --------
(unaudited)
(in thousands, except per share
data)
<S> <C> <C> <C> <C>
Pro forma revenues...................... $86,939 $77,861 $332,005 $269,110
Pro forma net income (loss)............. 5,089 (3,806) 1,692 (8,463)
Pro forma basic and diluted net income
(loss) per share....................... 0.13 (0.10) 0.04 (0.22)
</TABLE>

The pro forma net income for the three months ended March 31, 1999 includes
$1.6 million of nonrecurring acquisition and related costs. Pro forma net
income, adjusted to exclude nonrecurring acquisition and related costs was $6.3
million.

The pro forma net loss for the three months ended March 31, 1998 includes
$11.6 million of nonrecurring acquisition and related costs and compensation to
stockholders. Pro forma net income, adjusted to exclude nonrecurring
acquisition and related costs and compensation to stockholders was $5.9
million.

The pro forma net income for the year ended December 31, 1998 includes $27.7
million of nonrecurring acquisition and related costs and compensation to
stockholders. Pro forma net income, adjusted to exclude nonrecurring
acquisition and related costs and compensation to stockholders was $24.9
million.

The pro forma net loss for the year ended December 31, 1997, includes $25.6
million of nonrecurring acquisition and related costs, recapitalization costs
and compensation to stockholders. Pro forma net income adjusted to exclude
nonrecurring acquisition and related costs, recapitalization costs and
compensation to stockholders was $11.9 million.

The Company's other purchase business combinations are immaterial to the
combined financial statements.

Unaudited Pro Forma Net Income (Loss) Per Share

The Company has applied Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" ("SFAS No. 128") to all periods presented in these
financial statements. SFAS No. 128 requires disclosure of basic and diluted
EPS. Basic EPS is computed by dividing reported earnings available to common
stockholders by the weighted average number of shares outstanding without
consideration of common stock equivalents or other potentially dilutive
securities. Diluted EPS gives effect to common stock equivalents and other
potentially

F-9
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

dilutive securities outstanding during the period. For all periods presented
EPS has been computed using the shares that will be issued upon the
Distribution based on the number of outstanding Snyder common shares on June
22, 1999. Basic and diluted EPS are the same for all years presented as there
will be no Healthcare options granted until the date of the Distribution.

Unaudited Interim Financial Statements

The accompanying unaudited combined balance sheet as of March 31, 1999 and
the combined statements of income and cash flows for the three months ended
March 31, 1999 and March 31, 1998 have been prepared by the Company without
audit. Certain information and footnote disclosures normally included in
financial statements presented in accordance with generally accepted accounting
principles have been omitted. The Company believes the disclosures made are
adequate to make the information presented not misleading. In the opinion of
the Company, the accompanying unaudited combined financial statements reflect
all adjustments, including only normal recurring adjustments, necessary to
present fairly the financial position of the Company at March 31, 1999 and the
results of operations and cash flows for the three months ended March 31, 1999
and March 31, 1998.

Business Considerations

There are important risks associated with the Company's business and
financial results. These risks include (i) the Company's reliance on two
significant clients; (ii) the Company's ability to sustain and manage future
growth; (iii) the Company's ability to manage and successfully integrate the
businesses it has acquired and may acquire in the future; (iv) the Company's
ability to successfully manage its international operations; (v) the potential
adverse effects of fluctuations in foreign exchange rates; (vi) the Company's
dependence on industry trends toward outsourcing of marketing services in the
pharmaceutical industry; (vii) the risks associated with the Company's reliance
on technology and the risk of business interruption resulting from a temporary
or permanent loss of such technology; (viii) government regulation of the
pharmaceutical industry; (ix) the Company's ability to recruit and retain
qualified personnel; and (x) lack of operating history as an independent
company.

2. Significant Clients:

The Company had two clients that represented 13.8% and 10.4% for the year
ended 1998, 12.0% and 12.7% for the year ended 1997, and 14.0% and 11.1% for
the year ended 1996 of the Company's total revenue.

3. Summary of Significant Accounting Policies:

Cash and Equivalents

Marketable Securities

The Company's securities classified as "available-for-sale" are reported at
market value. Unrealized gains and losses from securities "available-for-sale"
are reported as comprehensive income (loss) and included as a component of
investments and advances from Snyder.

Property and Equipment

Property and equipment is stated at cost. The Company depreciates furniture,
fixtures and office equipment on a straight-line basis over three to ten years;
computer equipment over two to four years and buildings over

F-10
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

forty years. Leasehold improvements are amortized on a straight-line basis over
the shorter of the term of the lease or the estimated useful lives of the
improvements.

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

Revenue Recognition

On pharmaceutical detailing contracts, the Company recognizes revenue and
associated costs when services have been performed by account executives. For
strategic consulting services and educational marketing programs, the Company
recognizes revenues and associated costs as services are performed on behalf of
clients. Unbilled services represent revenues earned on contracts but billed in
a subsequent accounting period. Unearned revenue represents billings or client
payments made in advance of services performed. Client advances represent
amounts received to be disbursed to third parties for payment on behalf of
clients.

Goodwill and Other Intangible Assets

The costs of licenses to market pharmaceutical products and contractual
covenants are amortized on a straight-line basis over the term of the related
agreements, which are ten to fifteen years and four years, respectively.

Income Taxes

Prior to their merger with Snyder, certain of the U.S.-based Pooled Entities
were treated as S corporations or limited liability companies for income tax
purposes. Accordingly, no provision for federal or state income taxes, except
in certain states that do not recognize S corporations or limited liability
companies, has been made for these entities through the date of their mergers
with the Company in the accompanying combined financial statements.

The Company's subsidiaries with operations in the U.K., France and Germany
pay taxes in their respective countries, on a corporate level similar to a C
corporation in the U.S.

Pro Forma Adjusted Income (Loss) Data (Unaudited)

The following unaudited pro forma adjusted net income (loss) amounts include
a provision for federal and state income taxes as if the Company had been a
taxable C corporation for all periods presented. The pro forma income tax rate
on the Company's recurring operations reflects the combined federal, state and
foreign income taxes of approximately 41.0%, 48.8% and 46.9%, for the years
ended December 31, 1998, 1997 and 1996, respectively. The pro forma income tax
rates in the table below differ from the pro forma income tax rates on the
Company's recurring operations due to the nondeductibility of certain of the
acquisition and related costs. The Company's December 31, 1996 and 1998 tax
provisions exceed its statutory rate due to the recognition of
certain acquisition and related costs, which are not deductible for income tax
purposes, and the pass through of S corporation losses directly to owners.

F-11
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

The table below presents this pro forma calculation of net income (loss):

<TABLE>
<CAPTION>
For the Three
Months For the Years
Ended March 31, Ended December 31,
---------------- ---------------------------
1999 1998 1998 1997 1996
------- ------- -------- -------- -------
(in thousands)
<S> <C> <C> <C> <C> <C>
Pro forma adjusted net income
(loss) data (unaudited):
Historical income (loss) from
continuing operations before
income taxes................ $ 8,398 $(2,097) $ 14,295 $ (6,784) $ 1,587
Pro forma provision for in-
come taxes.................. (3,309) (1,955) (12,849) (3,916) (4,316)
------- ------- -------- -------- -------
Pro forma adjusted net income
(loss)...................... $ 5,089 $(4,052) $ 1,446 $(10,700) $(2,729)
======= ======= ======== ======== =======
</TABLE>

Foreign Currency Translations

Assets and liabilities of the Company's international operations are
translated using the exchange rate in effect at the balance sheet date. Revenue
and expense accounts for these subsidiaries are translated using the average
exchange rate during the period. Foreign currency translation adjustments are
reported as comprehensive income (loss) and included as a component of
investments and advances from Snyder.

Estimates and Assumptions

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

Fair Value of Financial Instruments

Concentration of Credit Risk

Concentration of credit risk is limited to cash and equivalents, marketable
securities, accounts receivable and unbilled services. The Company places its
investments in highly rated financial institutions, U.S. Treasury bills,
investment grade short-term debt instruments and state and local
municipalities, while limiting the amount of credit exposure to any one entity.
The Company's receivables are concentrated with customers in the pharmaceutical
industry. The Company does not require collateral or other security to support
clients' receivables.

New Accounting Pronouncements

During 1998, the Company adopted Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income" ("SFAS No. 130"). Included within
accumulated other comprehensive income are

F-12
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

the cumulative amounts for foreign currency translation adjustments and
unrealized gains and losses on marketable securities. The cumulative foreign
currency translation adjustment was $(0.3) million, $0.9 million and
$0.2 million as of March 31, 1999, December 31, 1998 and 1997, respectively.
There was no cumulative unrealized gain on marketable securities as of March
31, 1999 and December 31, 1998. The cumulative unrealized gain on marketable
securities was $53,000 as of December 31, 1997.

During 1998, the Company adopted Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprise and Related Information."
The Company's management considers its business to be a single reportable
segment--the providing of integrated marketing and sales services to
pharmaceutical and life sciences companies. The Company's foreign operations
are disclosed in Note 15.

Accounting for Stock Options

Following the Distribution, the Company will account for its stock-based
compensation plan using the intrinsic value based method in accordance with the
provisions of APB Opinion No. 25, "Accounting for Stock Issued to Employees."
Pro forma disclosure will be made of net income and earnings per share,
calculated as if the Company accounted for its stock-based compensation plan
using the fair value based method in accordance with the provisions of
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-
Based Compensation" ("SFAS No. 123").

4. Marketable Securities:

The unrealized gains and losses and market values of the Company's available-
for-sale securities as of December 31, 1997, are summarized as follows (in
thousands).

<TABLE>
<CAPTION>
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ------
<S> <C> <C> <C> <C>
December 31, 1997
Available for sale:
Equity securities................. $ 832 $ 54 $-- $ 886
Municipal tax-exempt bonds........ 223 -- (1) 222
------ ---- ---- ------
$1,055 $ 54 $ (1) $1,108
====== ==== ==== ======
</TABLE>

The Company did not have any marketable securities outstanding as of December
31, 1998.

5. Property and Equipment:

Property and equipment consist of the following:

<TABLE>
<CAPTION>
As of December
31,
---------------
1998 1997
------- ------
(in thousands)
<S> <C> <C>
Buildings and leasehold improvements........................ $ 5,178 $1,250
Computers and equipment..................................... 8,465 5,727
Furniture and fixtures...................................... 1,331 1,261
------- ------
14,974 8,238
Accumulated depreciation.................................... (4,946) (3,358)
------- ------
$10,028 $4,880
======= ======
</TABLE>

Depreciation expense totaled $2.2 million, $1.0 million, and $0.3 million in
1998, 1997 and 1996, respectively.

F-13
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

6. Goodwill and Other Intangible Assets:

Goodwill and other intangible assets consist of the following:

<TABLE>
<CAPTION>
As of December
31,
----------------
1998 1997
------- -------
(in thousands)
<S> <C> <C>
Goodwill................................................... $80,436 $21,612
License agreements......................................... 6,159 5,669
Contractual covenant and marketing rights.................. 1,112 1,112
------- -------
87,707 28,393
Accumulated amortization................................... (6,979) (2,110)
------- -------
$80,728 $26,283
======= =======
</TABLE>

Amortization expense of goodwill and other intangible assets totaled $3.2
million, $1.2 million and $0.9 million in 1998, 1997 and 1996, respectively.

7. Debt:

Long-Term Borrowings

Long-term borrowings consist of the following:

<TABLE>
<CAPTION>
As of
December 31,
-------------
1998 1997
------ ------
(in
thousands)
<S> <C> <C>
German bank debt, 6.3% weighted average interest rate, due
April 2004,
partially secured by building in Germany.................... $1,388 $ --
French bank debt, 8.02% weighted average rate, due August
2002........................................................ 85 3,697
Other........................................................ -- 137
------ ------
1,473 3,834
Current maturities of long-term borrowings................... -- (137)
------ ------
$1,473 $3,697
====== ======
</TABLE>

The foreign term debt requires certain subsidiaries to meet restrictive
covenants concerning net worth and debt service coverage and are secured by the
assets of those subsidiaries.

In addition to the debt listed above, approximately $0.6 million in debt with
a weighted average interest rate of 8.6%, primarily classified as current as of
December 31, 1996, was paid in full during 1997.

Future minimum payments as of December 31, 1998, on long-term borrowings, are
as follows (in thousands):

<TABLE>
<S> <C>
1999.................................................................. $ --
2000.................................................................. 332
2001.................................................................. 293
2002.................................................................. 292
2003.................................................................. 278
Thereafter............................................................ 278
------
Total............................................................... $1,473
======
</TABLE>

F-14
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Related Party Borrowings

Related party borrowings as of December 31, 1997, consist of a $457,000
promissory note payable to a founder of one of the acquired subsidiaries.
Interest on the note accrued at 6.0%. The note was repaid in full on September
30, 1998, together with accrued interest of $14,000.

In accordance with the provisions of its formation agreement and prior to its
merger with Snyder, a subsidiary issued promissory notes to its founder and an
investor in the principal amounts of $6.7 million and $10.0 million,
respectively. The notes were unsecured, with interest at the prime rate plus
2.0%, and were payable no later than August 1, 1998. The notes were repaid in
full on November 25, 1997, together with accrued interest of $0.5 million.

Lines of Credit

Lines of credit consist of the following:
<TABLE>
<CAPTION>
As of
December 31,
------------
1998 1997
---- -------
(in
thousands)
<S> <C> <C>
French bank line of credit, 8.02% weighted average stated
interest rate,
$4.1 million aggregate borrowing limit........................ $198 $ 2,609
Secured revolving loan of acquired U.S. subsidiary, 7.5%, due
December 31, 2003, reflected as current liability as
subsidiary was not in compliance with certain financial
covenants, terminated by the Company in 1998.................. -- 20,000
U.S. bank line of credit, 8.6% weighted average interest rate.. -- 266
---- -------
$198 $22,875
==== =======
</TABLE>

The Company maintains various lines of credit with banking and financial
institutions, requiring certain subsidiaries to meet restrictive covenants
concerning net worth and debt service coverage and are secured by the assets of
those subsidiaries. In aggregate, the Company had lines of credit available for
$5.8 million with interest rates ranging from 7.75% to 8.75% at December 31,
1998.

8.Income Taxes:

The Company's income tax provision includes the following components:

<TABLE>
<CAPTION>
For the Years
Ended December 31,
------------------------
1998 1997 1996
------- ------- ------
(in thousands)
<S> <C> <C> <C>
Current:
U.S.--Federal.................................... $ 5,826 $ 2,228 $ 365
U.S.--State and city............................. 1,672 1,207 85
Foreign.......................................... 4,622 3,078 1,297
------- ------- ------
$12,120 $ 6,513 $1,747
------- ------- ------
Deferred:
U.S.--Federal.................................... $ 807 $(3,984) $ --
U.S.--State and city............................. 260 (766) --
Foreign.......................................... (338) 171 (243)
------- ------- ------
729 (4,579) (243)
------- ------- ------
Income tax provision............................. $12,849 $ 1,934 $1,504
======= ======= ======
</TABLE>

F-15
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

The provision for taxes on income differs from the amount computed by
applying the U.S. federal income tax rate as a result of the following:

<TABLE>
<CAPTION>
For the Years
Ended December
31,
-----------------------
1998 1997 1996
---- ----- ----
<S> <C> <C> <C>
Taxes at statutory U.S.
federal income tax
rate.......................................... 35.0% 35.0 % 35.0%
Losses passed through to
owners........................................ 0.0 40.9 15.1
State and city income
taxes, net of federal
tax benefit................................... 9.4 (9.4) 10.7
Tax effect of acquired
subsidiary
reorganization................................ 0.0 (4.4) 0.0
Foreign tax rate
differential.................................. 2.1 (5.5) 0.9
Goodwill amortization.......................... 3.7 (2.0) 0.0
Acquisition costs and
other permanent
differences................................... 39.7 (83.1) 33.1
---- ----- ----
Effective tax rate............................. 89.9% (28.5)% 94.8%
==== ===== ====
</TABLE>

<TABLE>
<CAPTION>
As of
December 31,
--------------
1998 1997
------ ------
<S> <C> <C>
Reserve for doubtful accounts................................ $ 724 $1,411
Accrued expenses............................................. 2,498 2,141
Deferred compensation........................................ 128 134
Tax losses of subsidiaries................................... 3,955 4,569
Other........................................................ 337 59
------ ------
Gross deferred tax assets.................................... 7,642 8,314
------ ------
Property and equipment....................................... (180) --
Deferred revenues............................................ (2,868) (2,858)
Other........................................................ (497) (35)
------ ------
Gross deferred tax liabilities............................... (3,545) (2,893)
------ ------
Valuation allowance.......................................... -- --
------ ------
Net deferred tax asset....................................... $4,097 $5,421
====== ======
</TABLE>

Several of the Company's subsidiaries have operating loss tax carryforwards
that can be realized only if these subsidiaries generate taxable operating
income. Management continually assesses whether the Company's deferred tax
asset is realizable and believes that the deferred tax asset is realizable at
December 31, 1998.

At December 31, 1998, cumulative combined undistributed deficit of the
Company's foreign subsidiaries was approximately $0.9 million. However,
undistributed earnings exist at several of the Company's foreign subsidiaries.
No provision for U.S. income taxes or foreign withholding taxes has been made
since the Company considers the undistributed earnings to be permanently
invested in the foreign countries. Determination of the amount of unrecognized
deferred tax liability, if any, for the cumulative undistributed earnings of
the foreign subsidiaries is not practicable since it would depend upon a number
of factors which cannot be known until such time as a decision to repatriate
the earnings is made.

9. Acquisition and Related Costs:

The Company recorded $26.9 million in nonrecurring acquisition and related
costs during 1998. These costs consist of investment banking fees, expenses
associated with the accelerated vesting of options held by

F-16
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

employees of certain of the Company's acquirees, other professional service
fees, transfer taxes and other contractual payments. In addition, this amount
includes a charge of approximately $10.7 million for costs necessary to
consolidate and integrate certain of the Company's acquired operations in the
U.S., the U.K. and France. The Company is integrating acquired subsidiaries
that provide similar services within the same geographic regions.
Approximately nine locations will be combined into four, and the efforts will
not have a significant impact on the Company's workforce. The Company expects
these integration activities to be substantially complete by the third quarter
of 1999. The charge consists of approximately $4.1 million to consolidate and
terminate lease obligations, $5.3 million of severance and other costs
associated with the termination of 142 employees, and $1.3 million of fees
incurred for consulting services and other costs related to these integration
activities. The employees who were terminated are primarily redundant
operations and administrative personnel, as well as one underutilized sales
team in the United Kingdom. As of December 31, 1998, 58 employees had
terminated employment with the Company and $2.7 million had been charged
against the total liability, including $1.5 million in severance and related
payments.

The Company recorded $8.0 million in nonrecurring acquisition and related
costs during 1997. These costs consist primarily of investment banking fees,
professional service fees, travel expenses and other contractual payments.

During the three months ended March 31, 1999, the Company recorded $1.6
million in nonrecurring acquisition and related costs. This amount is for
additional costs necessary to consolidate and integrate certain of the
Company's acquired operations in the U.S. and U.K. under the Company's plan
initiated in 1998. The charge recorded in the first quarter of 1999 consists
of $1.3 million in severance and related costs associated with the termination
of 23 employees, and $0.3 million in consulting services and other costs
related to these integration activities. As of March 31, 1999, 128 employees
had terminated employment with the Company and $5.7 million had been charged
against the total liability of $12.2 million.

During the three months ended March 31, 1998, the Company recorded $11.4
million in nonrecurring acquisition and related costs. These costs are
primarily related to the consummation of pooling of interests transactions in
the first quarter of 1998 and consist of investment banking fees, other
professional service fees and other contractual payments. In addition, this
amount includes a charge of approximately $4.4 million for costs necessary to
consolidate and integrate certain of the Company's acquired operations in the
U.S. and the U.K.

10. Compensation to Stockholders:

Prior to their merger with Snyder, certain stockholders of the acquired
companies received annual compensation in their roles as managers in excess of
amounts that they will receive pursuant to employment agreements they have
entered into with the Company. The amount by which the historical compensation
paid to these managers exceeds that provided in their employment contracts has
been classified as compensation to stockholders in the accompanying combined
statement of income.

11. Stock Incentive Plans:

At the time of the Distribution, the Company expects to adopt a stock
incentive plan to provide for share-based incentive compensation for key
management, consultants and directors. Both vested and unvested Snyder
employee stock options held by employees of Snyder Healthcare Services, Inc.
will be cancelled and replaced with stock options to purchase shares of common
stock of Snyder Healthcare Services, Inc. Vested and unvested Snyder employee
stock options held by employees of Snyder will be retained by employees of
Snyder and their exercise prices will be adjusted. The aggregate intrinsic
value of the options outstanding will not be increased, and the ratio of the
exercise price per option to the market value per share will not change.

F-17
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

On the date of the Distribution, the Company will issue shares of restricted
stock of Snyder Healthcare Services, Inc. to certain officers and directors of
the Company. The Company will recognize approximately $5.0 million of
compensation expense associated with these grants. Of the total compensation
expense approximately $1.5 million will be recorded at the time of the
Distribution for the portion of the shares which are immediately vested. The
balance will be recorded ratably over the four year vesting period.

12. Pension and Profit-Sharing Plans:

Snyder and certain of its subsidiaries maintain defined contribution benefit
plans. Pension and profit sharing costs of the Company related to these plans
amounted to approximately $0.8 million, $0.2 million and $0.2 million for 1998,
1997 and 1996, respectively.

13. Leases:

The Company leases certain facilities, office equipment and other assets. The
following is a schedule of future minimum lease payments for these operating
leases at December 31, 1998 (in thousands):

<TABLE>
<S> <C>
Years Ending December 31,
1999................................................................. $4,695
2000................................................................. 2,668
2001................................................................. 1,059
2002................................................................. 600
2003................................................................. 600
------
Total minimum lease payments......................................... $9,622
======
</TABLE>

Rental expense for all operating leases was approximately $8.2 million, $8.0
million and $6.7 million for the years ended December 31, 1998, 1997 and 1996,
respectively.

14. Commitments and Contingencies:

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

15. Geographical Data:

The Company has operations in the United States, as well as the more mature
markets of Western Europe, which include the United Kingdom, France and
Germany.

<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Revenues:
United States................................... $175,840 $118,293 $ 82,374
Western Europe.................................. 145,660 90,674 62,330
-------- -------- --------
Total......................................... $321,500 $208,967 $144,704
======== ======== ========
</TABLE>

F-18
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

16. Selected Quarterly Financial Data (unaudited, in thousands):

The following table summarizes financial data by quarter for the Company for
1998 and 1997.

<TABLE>
<CAPTION>
1998 Quarter Ended
---------------------------------------------------
March 31 June 30 September 30 December 31 Total
-------- ------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C>
Revenues................ $67,356 $83,957 $ 80,232 $89,955 $321,500
Gross profit............ 18,193 23,443 20,091 23,726 85,453
Net income (loss)....... (4,052) 6,670 (3,771) 2,599 1,446
Pro forma historical net
income (loss) per share
(diluted).............. (0.11) 0.18 (0.10) 0.07 0.04
Pro forma net income
(loss)................. (4,052) 6,670 (3,771) 2,599 1,446
Pro forma adjusted net
income (loss) per share
(diluted).............. (0.11) 0.18 (0.10) 0.07 0.04
Pro forma adjusted net
income, excluding
nonrecurring
acquisition and related
costs and compensation
to stockholders........ 5,642 6,842 4,915 7,340 24,739
Pro forma adjusted net
income, excluding
nonrecurring
acquisition and related
costs and compensation
to stockholders per
share (diluted)........ 0.15 0.18 0.13 0.19 0.65
<CAPTION>
1997 Quarter Ended
---------------------------------------------------
March 31 June 30 September 30 December 31 Total
-------- ------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C>
Revenues................ $41,520 $47,343 $ 51,021 $69,083 $208,967
Gross profit............ 10,235 12,373 12,645 17,368 52,621
Net income (loss)....... 222 2,806 (10,891) (855) (8,718)
Pro forma historical net
income (loss) per share
(diluted).............. 0.01 0.07 (0.29) (0.02) (0.23)
Pro forma net income
(loss)................. (302) 2,281 (10,269) (2,410) (10,700)
Pro forma adjusted net
income (loss) per share
(diluted).............. (0.01) 0.06 (0.27) (0.06) (0.28)
Pro forma adjusted net
income excluding
nonrecurring
acquisition and related
costs, recapitalization
costs and compensation
to stockholders........ 2,304 3,174 1,466 2,678 9,622
Pro forma adjusted net
income, excluding
nonrecurring
acquisition and related
costs, recapitalization
costs and compensation
to stockholders per
share (diluted)........ 0.06 0.08 0.04 0.07 0.25
</TABLE>

The pro forma amounts include a provision for federal, foreign and state
income taxes as if the Company had been a taxable C corporation for all periods
presented.

F-19
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of Snyder Communications, Inc.:

We have audited the accompanying consolidated balance sheet of CLI Pharma
S.A. and subsidiaries as of December 31, 1997, and the related statements of
income, equity, and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the consolidated financial statements referred to above
presents fairly, in all material respects, the financial position of CLI Pharma
S.A. as of December 31, 1997 and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

Neuilly-sur-Seine, France
June 21, 1999

F-20
<PAGE>

CLI PHARMA S.A.

CONSOLIDATED BALANCE SHEET
As of December 31, 1997
(in FRFk)

<TABLE>
<S> <C>
ASSETS
Current Assets:
Cash and equivalents................................................. 25,473F
Accounts receivable.................................................. 49,183
Unbilled services.................................................... 1,762
Prepaid expenses..................................................... 1,970
VAT receivable....................................................... 4,052
Other current assets................................................. 1,513
------
Total current assets............................................... 83,953
Property and equipment, net............................................ 6,293
Intangible assets, net................................................. 31
Other non-current assets............................................... 2,481
------
Total assets....................................................... 92,758F
======
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable..................................................... 4,858F
Accrued payroll...................................................... 16,947
Accrued expenses..................................................... 6,948
VAT payable.......................................................... 17,578
Unearned revenue..................................................... 533
------
Total current liabilities.......................................... 46,864
Long-term obligations under capital leases............................. 66
Commitments and contingencies
Equity:
Capital stock, nominal value 100 FRF, 2,500 shares issued and
outstanding......................................................... 250
Retained earnings.................................................... 45,578
------
Total equity........................................................... 45,828
------
Total liabilities and equity........................................... 92,758F
======
</TABLE>

The accompanying notes are an integral part of this consolidated balance sheet.

F-21
<PAGE>

CLI PHARMA S.A.

CONSOLIDATED STATEMENT OF INCOME
For the Year Ended December 31, 1997
(in FRFk)

<TABLE>
<S> <C>
Revenues............................................................... 214,250F
Operating expenses:
Costs of services...................................................... 167,534
Selling, general and administrative.................................... 18,865
-------
186,399
-------
Income from operations................................................. 27,851
Interest expense....................................................... (61)
Investment income...................................................... 318
-------
Income before taxes.................................................... 28,108
Income tax provision................................................... 12,253
-------
Net income 15,855F
=======
</TABLE>

The accompanying notes are an integral part of this consolidated statement of
income.

F-22
<PAGE>

CLI PHARMA S.A.

CONSOLIDATED STATEMENT OF EQUITY
For the Year Ended December 31, 1997
(in FRFk)

<TABLE>
<CAPTION>
Retained
Capital Stock Earnings Total
------------- -------- ------
<S> <C> <C> <C>
Balance, December 31, 1996....................... 250F 32,772F 33,022F
Net income....................................... -- 15,855 15,855
Dividends........................................ -- (3,049) (3,049)
------ ------ ------
Balance, December 31, 1997....................... 250F 45,578F 45,828F
====== ====== ======
</TABLE>

The accompanying notes are an integral part of this consolidated statement of
equity.

F-23
<PAGE>

CLI PHARMA S.A.

CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended December 31, 1997
(in FRFk)

<TABLE>
<S> <C>
Cash flows from operating activities:
Net income............................................................ 15,855F
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization....................................... 805
Loss on disposal of property and equipment.......................... 2
Other noncash amounts............................................... 109
Changes in assets and liabilities:
Accounts receivable................................................. (7,753)
Other receivables................................................... (333)
Prepaid expenses.................................................... (1,059)
Accrued payroll, accounts payable and accrued expenses.............. 10,825
Unearned revenue.................................................... 323
Other non-current assets............................................ (133)
------
Net cash provided by operating activities............................. 18,641
------
Cash flows from investing activities:
Purchase of property and equipment.................................. (2,472)
Purchase of license agreements...................................... (120)
Proceeds from sales of property and equipment....................... 86
------
Net cash used in investing activities................................. (2,506)
------
Cash flows from financing activities:
Dividends........................................................... (3,049)
------
Net cash used in financing activities................................. (3,049)
------
Net increase in cash and equivalents.................................. 13,086
Cash and equivalents, beginning of period............................. 12,387
------
Cash and equivalents, end of period................................... 25,473F
======
Supplemental Disclosure of cash flow information:
Cash paid for interest.............................................. 60F
Cash paid for income taxes.......................................... 6,555F
</TABLE>

The accompanying notes are an integral part of this consolidated statement of
cash flows.

F-24
<PAGE>

CLI PHARMA S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997
(in FRF)

1. ORGANIZATION AND BUSINESS

Organization and business

In 1984, Christian Levistre founded CLI Pharma S.A. ("CLI Pharma" or the
"Company"), a French Societe Anonyme. CLI Pharma's initial operations were
devoted to the recruitment of healthcare operations managers on behalf of large
pharmaceutical companies. Since 1984, CLI Pharma has expanded its scope of
services to include: the formation of regional doctor teams who assist
laboratories in marketing pharmaceutical products and the recruitment of
clinical research and medical sales personnel on behalf of large pharmaceutical
companies. The consolidated financial statements include the Company's ten
operating subsidiaries: (WP Medica, WP Sante, WP Production, WPConseil, WP
Pharma, CLI Medica, CLI Sante, CLI Conseil, CLI Promotion and CLI France).

At December 31, 1997, CLI Pharma was owned directly by Christian Levistre
(41%) and Raymat Finance SA (59%), which is itself owned by Christian Levistre
and his family (99.99%).

Business considerations

There are important risks associated with the Company's business and
financial results. These risks include (i) the Company's reliance on
significant clients; four clients each represented more than 10% of its 1997
revenues (see Note 3); (ii) the Company's dependence on industry trends toward
outsourcing of marketing services; and (iii) the Company's ability to recruit
and retain qualified personnel.

2. SUBSEQUENT EVENT

On March 25, 1998, Snyder Communications, Inc. ("Snyder") acquired all of the
outstanding shares of the Company's capital stock in a purchase transaction.
The purchase price consideration consisted entirely of Snyder common stock.

3. SIGNIFICANT CLIENTS

The Company had four clients that individually represented 13.3%, 13.2%,
12.4% and 11.0%, respectively, of its revenues for the year ended December 31,
1997.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Equivalents

Cash and equivalents are mainly composed of amounts in operating accounts,
money market investments and other short-term instruments, stated at cost,
which approximate their market value, with original maturities of three months
or less.

Property and equipment

Property and equipement is stated at cost. The Company depreciates furniture,
fixtures and office equipment on a straight-line basis over three to ten years;
computer equipment over two to four years; and buildings over twenty years.
Leasehold improvements are amortized on a straight-line basis over their
estimated useful lives.

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

F-25
<PAGE>

CLI PHARMA S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in FRF)

Revenue recognition

Services provided by the Company consist primarily of pharmaceutical sales.
On pharmaceutical sales contracts, the Company recognizes revenue and
associated costs when services have been performed by account representatives,
in accordance with the terms of the contract.

Income taxes

The Company incurred income taxes on its 1997 taxable income at a rate of
41.7%, the legal income tax rate in France.

Estimates and Assumptions

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

Concentration of credit risk

Concentration of credit risk is limited to cash and equivalents, accounts
receivable and unbilled services. The Company's receivables are concentrated
with customers in pharmaceutical industries. The Company does not require
collateral or other security to support clients' receivables.

5. PROPERTY AND EQUIPMENT

Property and equipment consist of the following (in thousands):

<TABLE>
<CAPTION>
December 31,
1997
-------------
<S> <C>
Buildings and leasehold improvements 4,430F
Computer and equipment...................................... 1,136
Furniture and fixtures...................................... 2,249
------
7,815
Accumulated depreciation.................................... (1,522)
------
Net property and equipment 6,293F
======

6. INTANGIBLE ASSETS

Intangible assets consist of the following (in thousands):
<CAPTION>
December 31,
1997
-------------
<S> <C>
License agreements 222F
Less accumulated amortization............................... (191)
------
Net intangible assets 31F
======
</TABLE>

License agreements are amortized over their useful lives which are generally
one year.

F-26
<PAGE>

CLI PHARMA S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN FRF)
7. INCOME TAXES

The income tax provision of 12,253,000F in the accompanying consolidated
statement of income consists entirely of income taxes to the French government.
All of the provision relates to current income taxes. No deferred income tax
provision or benefit was incurred during the year ended December 31, 1997.

8. LEASES

<TABLE>
<CAPTION>
Capital Operating
Years ending December 31, Leases Leases
-------------------------------------------------------- ------- ---------
<S> <C> <C>
1998.................................................... 36F 1,352F
1999.................................................... 36 789
2000.................................................... 36 --
2001.................................................... 36 --
2002.................................................... 23 --
--- -----
Total minimum lease payments............................ 167 2,141F
=====
Less : Amount representing interest..................... (49)
---
Total obligation under capital leases................... 118
Less : Current portion.................................. (52)
---
Long-term portion....................................... 66F
===
</TABLE>

Property and equipment, net, on the consolidated balance sheet includes
118,000F for equipment purchased under capital leases as of December 31, 1997.

Rental expense for all operating leases was approximately 1,352,000F for the
year ended December 31, 1997. Rental expense included 341,000F to a related
party (see Note 9).

9. RELATED PARTIES

The Company leases office space from an entity owned by the Levistre family.
Rent expense related to this space in 1997 equalled 341,000F and is included in
selling, general and administrative expense on the accompanying consolidated
statement of income.

10. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following (in
thousands):

<TABLE>
<CAPTION>
December 31,
1997
------------
<S> <C>
Payroll and related taxes 16,947F
Accrued income taxes......................................... 6,096
Accounts payable............................................. 4,858
Other accrued tax liabilities................................ 590
Other accrued expenses....................................... 210
Current portion of capital lease obligations................. 52
------
28,753F
======
</TABLE>

F-27
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of Snyder Communications, Inc.:

We have audited in accordance with generally accepted auditing standards, the
combined financial statements of Snyder Healthcare Services, Inc. (the
"Company"), as defined in Note 1 to the combined financial statements, included
in this Form 10 and have issued our report thereon dated June 22, 1999. Our
audits were made for the purpose of forming an opinion on the basic combined
financial statements taken as a whole. Schedule II Valuation and Qualifying
Accounts included in the Form 10 is the responsibility of the Company's
management and is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not part of the basic combined financial
statements. This schedule has been subjected to the auditing procedures applied
in the audits of the basic combined financial statements and, in our opinion,
fairly states in all material respects the financial data required to be set
forth therein in relation to the basic combined financial statements taken as a
whole.

ARTHUR ANDERSEN LLP

Washington, D.C.
June 22, 1999

S-1
<PAGE>

SNYDER HEALTHCARE SERVICES, INC.

SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
(in thousands)

<TABLE>
<CAPTION>
Balance at Additions Deductions from Reserve Balance at
Beginning Charged to Cost for Purpose for Which Translation End of
of Year and Expense Reserve was Created Adjustment Year
---------- --------------- ----------------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1998 allowance for
doubtful accounts...... $3,924 $ 1,162 $2,118 $ 3 $2,971
1997 allowance for
doubtful accounts...... 510 3,717 296 (7) 3,924
1996 allowance for
doubtful accounts...... 301 220 7 (4) 510
<CAPTION>
Balance at Additions Deductions from Reserve Balance at
Beginning Charged to Cost for Purpose for Which Translation End of
of Year and Expense Reserve was Created Adjustment Year
---------- --------------- ----------------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1998 accrual for
integration activities. $ -- $10,654 $2,683 $-- $7,971
1997 accrual for
integration activities. -- -- -- -- --
1996 accrual for
integration activities. -- -- -- -- --
</TABLE>

S-2
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Directors and Officers.

Section 145 of the General Corporation Law of the State of Delaware (the
"DGCL") empowers a Delaware corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation)
by reason of the fact that such person is or was a director, officer, employee
or agent of such corporation or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise. Such indemnification may
include expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection
with such action, suit or proceeding, provided that such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed
to the best interests of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe such person's conduct
was unlawful. A Delaware corporation is permitted to indemnify directors,
officers, employees and other agents of such corporation in an action by or in
the right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the person to be
indemnified has been adjudged to be liable to the corporation. Where a
director, officer, employee or agent of the corporation is successful on the
merits or otherwise in the defense of any action, suit or proceeding referred
to above or in defense of any claim, issue or matter therein, the corporation
must indemnify such person against the expenses (including attorneys' fees)
which he or she actually and reasonably incurred in connection therewith.

Snyder Communications' Bylaws provide that Snyder shall indemnify, to the
full extent and under the circumstances permitted by the DGCL in effect from
time to time, any past, present or future director or officer, made or
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, by reason of the fact that such person is or was a
director, officer, employee or agent, or was serving in such capacities at
another entity at the specific request of Snyder Communications, on the same
conditions provided by the DGCL. Snyder Communications' Bylaws further provide
that Snyder Communications shall indemnify any such person in any threatened,
pending or completed action or suit by or on behalf of Snyder under similar
conditions, except that no indemnification is permitted without judicial
approval if the person to be indemnified has been adjudged to be liable to
Snyder Communications. In addition, Snyder Communications' Bylaws provide that
the Board of Directors may also grant indemnification to any individual other
than an officer or director, as it may determine in its sole discretion.

As permitted by Section 102(b)(7) of the DGCL, Snyder Communications'
Certificate of Incorporation contains a provision eliminating the personal
liability of a director to Snyder Communications or its stockholders for
monetary damages for breach of fiduciary duty as a director, subject to certain
exceptions.

Snyder Communications maintains policies insuring its officers and directors
against certain civil liabilities, including liabilities under the Securities
Act.

II-1
<PAGE>

Item 21. Exhibits and Financial Schedules.

(a) The following is a list of Exhibits included as part of this
Registration Statement.

<TABLE>
<S> <C>
3.1 Amended and Restated Certificate of Incorporation (included as Annex A to
the Proxy Statement and Prospectus).
3.2 By-laws. (filed as Exhibit 3.2 of the Registrant's Registration Statement
on Form S-1(No. 333-7495)).**
5.1 Opinion of Weil, Gotshal & Manges LLP, as to the legality of the
securities.**
8.1 Opinion of Weil, Gotshal & Manges LLP, as to tax matters.**
9.1 Second Amended and Restated 1996 Stock Incentive Plan of Snyder
Communications, Inc. (included as Annex B to the Proxy Statement and
Prospectus).
10.1 Amended and Restated Employee Stock Purchase Plan of Snyder
Communications, Inc. (included as Annex C to the Proxy Statement and
Prospectus).
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Grant Thornton LLP.
23.3 Consent of Price Waterhouse.
23.4 Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5.1 to this
Registration Statement).**
23.5 Consent of Weil, Gotshal & Manges LLP (included in Exhibit 8.1 to this
Registration Statement).**
24.1 Powers of Attorney (included on the signature page of this Registration
Statement).
27.1 Financial Data Schedule.
99.1 Form of Proxy.**
</TABLE>
- --------
* Incorporated by reference.
** To be filed by amendment.

Item 22. Undertakings.

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-
effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided,
however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 19034 that are incorporated in the registration statement.

II-2
<PAGE>

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.

(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(1) That prior to any public reoffering of the securities registered
hereunder through the use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the registrant undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable registration form.

(2) The registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (e)(1) immediately preceding, or (ii) that purports to
meet the requirements of such Section 10(a)(3) of the Act and is issued in
connection with an offering of securities subject to Rule 415, will be filed as
a part of an amendment of the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any
liability under the Securities Act of 1933, each post-effective amendment shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
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 director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction on the question
whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.

(e) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this form, within one business day of receipt of
such request; and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.

(f) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

II-3
<PAGE>

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City and State of New York, on
this 28th day of June 1999.

SNYDER COMMUNICATIONS, INC.

By /s/ Daniel M. Snyder
------------------------------------
Daniel M. Snyder
Chairman of the Board of Directors
and Chief
Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Daniel M. Snyder, Michele D. Snyder and A.
Clayton Perfall, and each of them, with full power to act without the other,
his/her true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him/her and in his/her name, place and
stead, in any and all capacities, to sign any or all amendments to this
Registration Statement and any related Rule 462(b) registration statement, and
to file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he/she might or
could do in person, hereby rarifying and confirming all that said attorneys-in-
fact and agents, or any of them, or their or his/her substitutes, may lawfully
do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons on behalf of the Registrant
named below and in the capacities indicated, on the dates indicated.

Signatures Title Date

/s/ Daniel M. Snyder Chairman of the June 28, 1999
- ------------------------------------- Board of Directors
(Daniel M. Snyder) and Chief Executive
Officer

/s/ Michele D. Snyder Vice Chairman, June 28, 1999
- ------------------------------------- President, Chief
(Michele D. Snyder) Operating Officer
and Director

/s/ A. Clayton Perfall Chief Financial June 28, 1999
- ------------------------------------- Officer and
(A. Clayton Perfall) Secretary

/s/ David B. Pauken Chief Accounting June 28, 1999
- ------------------------------------- Officer and
(David B. Pauken) Secretary

/s/ Mortimer B. Zuckerman Director June 28, 1999
- -------------------------------------
(Mortimer B. Zuckerman)

/s/ Fred Drasner Director June 28, 1999
- -------------------------------------
(Fred Drasner)

/s/ Philip Guarascio Director June 28, 1999
- -------------------------------------
(Philip Guarascio)

/s/ Mark E. Jennings Director June 28, 1999
- -------------------------------------
(Mark E. Jennings)

II-4
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- -----------
<S> <C>
3.1 Amended and Restated Certificate of Incorporation (included as Annex A to the Proxy Statement and
Prospectus).
3.2 By-laws. (filed as Exhibit 3.2 of the Registrant's Registration Statement on
Form S-1(No. 333-7495)).*
5.1 Opinion of Weil, Gotshal & Manges LLP, as to the legality of the securities.**
8.1 Opinion of Weil, Gotshal & Manges LLP, as to tax matters.**
9.1 Second Amended and Restated 1996 Stock Incentive Plan of Snyder Communications, Inc. (included
as Annex B to the Proxy Statement and Prospectus).
10.1 Amended and Restated Employee Stock Purchase Plan of Snyder Communications, Inc. (included as
Annex C to the Proxy Statement and Prospectus).
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Grant Thornton LLP.
23.3 Consent of Price Waterhouse.
23.4 Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5.1 to this Registration Statement).**
23.5 Consent of Weil, Gotshal & Manges LLP (included in Exhibit 8.1 to this Registration Statement).**
24.1 Powers of Attorney (included on the signature page of this Registration Statement).
27.1 Financial Data Schedule.
99.1 Form of Proxy.**
</TABLE>
- --------
* Incorporated by reference.
** To be filed by amendment.

<PAGE>

Exhibit 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our reports
and to all references to our Firm included in or made a part of this
registration statement.

ARTHUR ANDERSEN LLP

Washington, D.C.
June 24, 1999

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our report dated April 11, 1997 accompanying the consolidated
financial statements of American List Corporation, included in the Proxy
Statement and Prospectus and Registration Statement of Snyder Communications,
Inc. on Form S-4 (the consolidated financial statements of American List
Corporation are not presented separately therein). We consent to the use of the
aforementioned report in such Proxy Statement and Prospectus and Registration
Statement and to the use of our name as it appears under the caption "Experts".

GRANT THORNTON LLP

Melville, New York
June 24, 1999

<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1999
<PERIOD-START> JAN-01-1998 JAN-01-1999
<PERIOD-END> DEC-31-1998 MAR-31-1999
<CASH> 47,931 56,404
<SECURITIES> 612 0
<RECEIVABLES> 78,901 94,759
<ALLOWANCES> 7,031 6,393
<INVENTORY> 0 0
<CURRENT-ASSETS> 283,035 322,909
<PP&E> 70,367 71,329
<DEPRECIATION> (47,755) 0
<TOTAL-ASSETS> 613,252 738,368
<CURRENT-LIABILITIES> 237,709 252,376
<BONDS> 0 0
0 0
0 0
<COMMON> 71 75
<OTHER-SE> 357,307 468,217
<TOTAL-LIABILITY-AND-EQUITY> 613,252 738,368
<SALES> 0 0
<TOTAL-REVENUES> 493,803 138,081
<CGS> 322,980 90,930
<TOTAL-COSTS> 419,342 115,098
<OTHER-EXPENSES> 39,514 709
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> (1,753) (286)
<INCOME-PRETAX> 36,832 22,658
<INCOME-TAX> 15,472 8,832
<INCOME-CONTINUING> 21,360 13,826
<DISCONTINUED> 1,446 5,089
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 22,806 18,915
<EPS-BASIC> 0.33 0.26
<EPS-DILUTED> 0.32 0.26

</TABLE>

<PAGE>

EXHIBIT 23.3

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-4 of Snyder Communications, Inc. of our report
dated May 30, 1997, relating to the financial statements of Brann Holdings
Limited, which appears in such Prospectus. We also consent to the reference to
us under the heading "Experts" in such Prospectus.

Price Waterhouse
Chartered Accountants and Registered Auditors
Bristol, England

June 24, 1999