SNYDER COMMUNICATIONS INC, S-4/A, 1999-09-01

SNYDER COMMUNICATIONS INC
S-4/A, 1999-09-01
BUSINESS SERVICES, NEC

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As filed with the Securities and Exchange Commission on September 1, 1999

Registration No. 333-81749
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- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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AMENDMENT NO. 2
TO
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

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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: [_]

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 September 1, 1999

Proxy Statement and Prospectus of

[LOGO OF SNYDER COMMUNICATIONS, INC. APPEARS HERE]

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

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SNC Common Stock circle.com Common Stock

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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. We propose to 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.

If the recapitalization proposal is implemented, 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 our stockholders 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. The
recapitalization should be tax-free to you and us, except with respect to any
cash you receive in lieu of fractional shares. We may, however, convert SNC
stock into circle.com stock or convert circle.com stock into SNC stock at any
time following implementation of the recapitalization proposal at specified
premiums. This would have the effect of reversing the recapitalization. We have
applied to list the circle.com stock on the Nasdaq National Market System under
the symbol "CRCM." The New York Stock Exchange has approved our application to
list the SNC stock under the symbol "SNC."

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 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

The recapitalization involves material risks. Please read the "Risk Factors"
beginning on page 15.

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 September , 1999 and is first
being mailed to stockholders on September , 1999.
<PAGE>

[LOGO OF SNYDER COMMUNICATIONS, INC. APPEARS HERE]
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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September , 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 August 31, 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
----
<S> <C>
QUESTIONS AND ANSWERS ABOUT PROPOSAL 1--THE RECAPITALIZATION PROPOSAL.... 1

PROXY STATEMENT AND PROSPECTUS SUMMARY................................... 3

SNYDER COMMUNICATIONS, INC. SELECTED FINANCIAL DATA...................... 10

SNC SELECTED FINANCIAL DATA.............................................. 12

CIRCLE.COM SELECTED FINANCIAL DATA....................................... 14

RISK FACTORS............................................................. 15

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS........................ 27

CAPITALIZATION .......................................................... 28

WHERE YOU CAN FIND MORE INFORMATION...................................... 30

INFORMATION ABOUT THE SPECIAL MEETING AND VOTING......................... 31
Date, Time And Place Of Meeting........................................ 31
Record Date............................................................ 31
Proposals To Be Considered At The Meeting.............................. 31
Vote Required To Approve The Proposals................................. 31
Quorum................................................................. 31
Procedure For Voting By Proxy.......................................... 32

PROPOSAL 1--THE RECAPITALIZATION PROPOSAL................................ 33
General................................................................ 33
Background and Reasons for the Recapitalization Proposal............... 34
Recommendation of the Board of Directors............................... 37
Management and Allocation Policies..................................... 37
Description of SNC Stock and circle.com Stock.......................... 43
Certain Anti-Takeover Provisions of Delaware Law and the Amended and
Restated Certificate of Incorporation and By-Laws..................... 52
Material Federal Income Tax Consequences............................... 53
Stock Exchange Listing of the Common Stocks............................ 56
Exchange Procedures.................................................... 56
Stock Transfer Agent and Registrar..................................... 56
Financial Advisor...................................................... 57
Effect on Existing Options............................................. 57
No Regulatory Approvals................................................ 57
No Dissenters' Rights.................................................. 57

THE HEALTHCARE SERVICES BUSINESS SPIN-OFF................................ 58

SNYDER COMMUNICATIONS--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS..................................... 59

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

SNC--BUSINESS............................................................ 82
General................................................................ 82
Industry Overview...................................................... 82
Industry Trends........................................................ 82
Growth Strategy........................................................ 83
Operations............................................................. 84
</TABLE>

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<TABLE>
<CAPTION>
Page
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<S> <C>
Competition............................................................ 90
Regulation............................................................. 91
Management............................................................. 91
Employees.............................................................. 92
Properties............................................................. 92

CIRCLE.COM--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS..................................... 93

CIRCLE.COM--BUSINESS..................................................... 98
General................................................................ 98
Industry Background.................................................... 98
Client Engagement Approach............................................. 99
Services............................................................... 99
Growth Strategy........................................................ 100
Client Case Studies.................................................... 101
System Architecture and Design of the DME(TM).......................... 104
Personnel and Culture.................................................. 105
Intellectual Property Rights........................................... 105
Competition............................................................ 106
U.S. and Foreign Government Regulation................................. 106
Management............................................................. 107
Properties............................................................. 108

PROPOSAL 2--ADOPTION OF AMENDED AND RESTATED STOCK INCENTIVE PLAN........ 109
Background and Reasons for the Proposal................................ 109
Summary of the Stock Incentive Plan.................................... 110
Recommendation of the Board of Directors............................... 117

PROPOSAL 3--ADOPTION OF AMENDED AND RESTATED STOCK PURCHASE PLAN......... 118
Background and Reasons for the Proposal................................ 118
Summary of the Stock Purchase Plan..................................... 118
Recommendation of the Board of Directors............................... 122

MANAGEMENT............................................................... 123

EXECUTIVE COMPENSATION................................................... 124

PRICE RANGE ON EXISTING COMMON STOCK AND DIVIDEND POLICY................. 126

INFORMATION ABOUT STOCKHOLDER PROPOSALS.................................. 126

EXPENSES OF SOLICITATION................................................. 126

LEGAL OPINIONS........................................................... 127

EXPERTS.................................................................. 127

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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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.

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, initially, a 20% retained interest in circle.com--
which we call "SNC."

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.

What are the tax consequences to me?

In the opinion of our counsel, you should not recognize any gain or loss for
federal income tax purposes as a result of the recapitalization, 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.

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.

What is happening to Snyder Communications' healthcare services business?

As we announced on June 23, 1999, we intend to spin-off our healthcare
services business, Ventiv
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Health, Inc. 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 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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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. 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.

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

The Recapitalization Proposal (page 33)

If the recapitalization proposal is implemented, we will 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 our stockholders
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. SNC's
retained interest in circle.com will not be represented by actual shares of
circle.com stock. SNC will have no voting rights with respect to its retained
interest in circle.com. The "retained interest" is simply a way of describing
that portion of the equity value of circle.com that is attributable to SNC. The
percentage of circle.com's equity value represented by this retained interest
will change in the future if actions, such as issuances of additional shares of
circle.com stock, repurchases of shares of circle.com stock, or transfers of
cash or other property between SNC and circle.com, are taken that change the
total number of outstanding shares of circle.com stock.

Our principal reason for the recapitalization is to enhance the value of our
separate businesses. We believe that the recapitalization will improve our
ability to separately manage and monitor the performance of our separate
businesses and to create additional incentives for the managers of those
businesses to maximize the financial performance of their groups.

The SNC stock and the circle.com stock are what are commonly referred to as
"tracking stocks," "targeted stocks" or "letter stocks," because each is
intended to reflect or "track" the separate performance of a business of Snyder
Communications. Tracking stock is an equity interest in a corporation with
rights determined by reference to the performance of specific assets of the
corporation. We will provide separate operating results and other business and
financial information with respect to SNC and circle.com. In addition, we have
established policies to assist us in allocating costs and charges between the
groups on an objective basis. We believe this will enable our stockholders to
gain a better understanding of the inherent value in each group.

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 reflect the performance of circle.com, and we
intend our SNC stock to reflect the performance of SNC and its retained
interest in circle.com. Holders of SNC stock and

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circle.com stock will be stockholders of a single company, Snyder
Communications. As a result, stockholders will continue to be subject to all of
the risks of an investment in Snyder Communications.

We may convert SNC stock into circle.com stock or convert circle.com stock
into SNC stock, in each case based on their relative market values, at any time
following implementation of the recapitalization proposal. This would have the
effect of reversing the recapitalization. The determination of the number of
shares received in any conversion will include a premium factor unless there is
an adverse tax event (as described more fully on page 48), in which case there
would be no premium factor included in the calculation. A premium factor of 15%
would be applied to the average market price per share of SNC stock when
converting the SNC stock into circle.com stock. A premium factor of 25% would
be applied to the average market price per share of circle.com stock if a
conversion of circle.com stock into SNC stock occurs in the first quarter after
issuance of the circle.com stock. This premium factor would decline ratably
each quarter after that over a period of three years to 15%. Any conversion
that included a premium factor would dilute the interests in Snyder
Communications for the holders of the class of common stock being issued in the
conversion.

We expect to incur approximately $23 million of expenses related to the
recapitalization proposal and the spinoff of our healthcare services business,
which will be borne by Snyder Communications. Of these expenses, approximately
$7 million, relating to the recapitalization proposal, will be reflected evenly
in the expenses of SNC and circle.com and approximately $16 million, relating
to the spin-off, will be reflected in the results from discontinued operations
of Snyder Communications.

SNC (page 82)

SNC is a leading international full-service direct marketing, advertising and
communications agency, with operations throughout the United States and the
United Kingdom and in continental Europe. SNC provides direct marketing
services to its clients through Brann Worldwide and Bounty SCA Worldwide and
advertising services through Arnold Worldwide. 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 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 98)

Circle.com is an 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
consulting regarding its clients' e-commerce strategies and related business
processes, consumer research, online media planning and creative design, which
it refers to as "front-end services," as well as architecture design, systems
integration, implementation and ongoing performance analysis, which it refers
to as "back-end services."

The circle.com stock is intended to separately reflect the performance of
circle.com. 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. Until May 1999, the
operations of circle.com were contained within the Brann Worldwide and Arnold
Worldwide divisions of Snyder Communications. 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.

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

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The Special Meeting

Proposals to be considered at the meeting (page 31)

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

. Proposal 1: The recapitalization proposal (page 33).

. 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 109).

. 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 117).

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 31)

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 28.9%
of the outstanding shares of our existing common stock as of August 26, 1999.
They have advised us that they intend to cause all shares that they
beneficially own to be voted in favor of each of the proposals being considered
at the special meeting.

Comparison of Existing Common Stock with SNC

Stock and circle.com Stock (page 43)

We have described below the significant differences between 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.

Voting Rights (page 49)

Existing Common Stock. Holders of our existing common stock have one vote per
share on all matters submitted to stockholders.

SNC Stock and circle.com Stock. On all matters as to which both classes of
stock will vote together as a single class:

. each share of SNC stock will have one vote; and

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. each share of circle.com stock will have a number of votes equal to the
average market value of a share of circle.com stock over the preceding
four calendar quarters (or such lesser period since the recapitalization
was implemented), divided by the average market value of a share of SNC
stock over the same period.

Accordingly, the relative per share voting rights of the SNC stock and the
circle.com stock will fluctuate depending on changes in the relative market
values of the two classes of common stock. For example, if the average market
value of a share of circle.com stock over the preceding calendar year is equal
to 150% of the SNC stock over the same period, each share of circle.com stock
would have 1.5 votes. Assuming that there continues to be four times the number
of shares of SNC stock outstanding as shares of circle.com stock, the shares of
SNC stock would represent approximately 73% of the total voting power of the
common stockholders and the shares of circle.com stock would represent
approximately 27% of the total voting power of the common stockholders.

Following the end of the calendar year in which the shares of circle.com
stock are initially issued, the number of votes per share of circle.com stock
will be determined on a quarterly basis at the beginning of each quarter.

The holders of each class of common stock will vote together as a single
class except in limited circumstances.

Rights on Sale of All or Substantially All Assets of a Group (page 45)

Existing Common Stock. Holders of existing common stock have no special
rights triggered by a sale of all or substantially all of the assets of a
group.

SNC Stock and circle.com Stock. Holders of SNC stock will have no special
rights triggered by a sale of all or substantially all of the assets of SNC.
However, if we sell all or substantially all of the assets attributed to
circle.com, we must either:

(1) pay a dividend to holders of circle.com stock equal to their
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:

. the sale is in connection with the liquidation of Snyder Communications;

. the sale is a split-off of circle.com to the holders of circle.com
stock;

. the sale is to a person or entity controlled by Snyder Communications;
or

. 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 of a class of stock into the stock of the other group (page 47)

Existing Common Stock. We do not have the option of converting shares of our
existing common stock into any other security of Snyder Communications.

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SNC Stock and circle.com Stock. We may convert either class of common stock
into shares of the other class at our option, in each case based on their
relative market values.

. If we convert SNC stock into circle.com stock, a premium factor of 15%
would be applied to the average market price per share of SNC, unless
there is an adverse tax event (as described more fully on page 48), in
which case there will be no premium factor included in the calculation.

. If we convert circle.com stock into SNC stock, a premium factor would be
applied to the average market price per share of circle.com stock,
unless there is an adverse tax event (as described more fully on page
48), in which case there will be no premium factor included in the
calculation. The premium factor will be 25% if the exchange occurs in
the first quarter after issuance of the circle.com stock and will
decline after that by one percentage point for each succeeding quarter
until the eleventh succeeding quarter. Upon the eleventh succeeding
quarter, the premium factor will be fixed at 15%.

Conversion of a class of stock into shares of the other class would have the
effect of reversing the recapitalization.

Redemption in exchange for stock of subsidiary (page 48)

Existing Common Stock. We do not have the option of redeeming shares of our
existing common stock.

SNC Stock and circle.com Stock. We will not have the option of redeeming
shares of SNC stock. Although we currently have no intention to do so, our
board of directors may in the future decide to split-off circle.com from Snyder
Communications. In order to effect a split-off, our board of directors has the
power to redeem the outstanding shares of circle.com stock in exchange for
shares of one or more of our wholly-owned subsidiaries then owning all of the
assets and liabilities attributed to circle.com.

Liquidation Rights (page 51)

Existing Common Stock. Holders of existing common stock share assets
remaining for distribution to holders of common stock in equal amounts per
share of existing common stock.

SNC Stock and circle.com Stock. Holders of SNC stock and circle.com stock
will share assets remaining for distribution to holders of common stock on a
per share basis in proportion to the liquidation units per share of the two
classes of stock. Each share of SNC stock will have .75 of a liquidation unit.
Each share of circle.com stock will have one liquidation unit. Based on the
number of shares outstanding on the effective date of the recapitalization, the
holders of SNC stock will be entitled to approximately 75% of the assets
remaining for distribution to common stockholders and the holders of circle.com
stock will be entitled to approximately 25% of those assets.

Stock Exchange Listing

Existing Common Stock. Our existing common stock is listed on the NYSE under
the symbol "SNC."

SNC Stock and circle.com Stock. We have received approval to list the SNC
stock on the NYSE under the symbol "SNC." We have applied to list the
circle.com stock on the Nasdaq National Market System under the symbol "CRCM."

Management and Allocation Policies (page 37)

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

7
<PAGE>

group to focus on its own business strategy and financial model. These policies
establish guidelines to allocate debt, corporate overhead, interest, taxes and
other shared activities between the two groups on an objective basis and to
ensure that a process of fair dealing governs the relationship between the
groups and the means by which the terms of any material transactions between
them shall be determined.

Risk Factors (page 15)

When evaluating the recapitalization proposal, you should be aware that there
are many risks. These risks are set forth under "Risk Factors" starting on page
15.

Material Federal Income Tax Consequences (page 53)

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 you or us, except with respect to any cash you
receive 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 legislative 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 on or 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.

Proposal 2--Adoption of our Amended and Restated Stock Incentive Plan (page
109)

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 from 6.1 million shares of existing common stock,
increased by 17.5% of the number of shares of existing common stock
authorized for issuance after March 7, 1997 by our board of directors,
to an aggregate of:

. million shares of SNC stock, increased by % of the number of
shares of SNC stock authorized for issuance after the effective date
of the amended plan by our board of directors; and

. million shares of circle.com stock, increased by % of the number
of shares of circle.com stock authorized for issuance after the
effective date of the amended plan by our board of directors.

8
<PAGE>

On June 22, 1999, our compensation committee adopted, and our board of
directors ratified 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. In addition, a
principal benefit of the recapitalization proposal is that it allows us to
retain the advantages of doing business as a single company and allows each
group to capitalize on relationships with the other group. To motivate the
employees of each group to cross-sell services and to provide the maximum
incentives 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.

Proposal 3--Adoption of our Amended and Restated Employee Stock Purchase Plan
(page 117)

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 15% discount. The terms of the amended plan,
including the size of the discount, 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.

9
<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. For all the periods
presented, income (loss) from discontinued operations includes the income
(loss) from discontinued operations of the healthcare services business, which
will be spun off to stockholders of record of Snyder Communications on a date
to be determined. For the years ended December 31, 1997 and 1996, the income
(loss) of discontinued operations 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. Prior to
their respective acquisitions, certain U.S.-based acquirees were not subject to
federal or state income taxes. Consequently, 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. See also "Snyder
Communications--Management's Discussion and Analysis of Financial Condition and
Results of Operations."

<TABLE>
<CAPTION>
For the Six
Months
Ended June 30, 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........... $299,426 $228,189 $493,803 $403,072 $349,223 $286,435 $195,834
======== ======== ======== ======== ======== ======== ========
Income (loss) from
continuing
operations............ $ 27,527 $ 6,548 $ 21,360 $(16,636) $ 15,481 $ 19,425 $ 8,641
======== ======== ======== ======== ======== ======== ========
Income (loss) from
discontinued
operations............ $ 12,639 $ 2,618 $ 1,446 $(10,225) $ (1,415) $ 6,930 $ 3,806
======== ======== ======== ======== ======== ======== ========
Extraordinary item(1).. $ -- $ -- $ -- $ -- $ (1,216) $ -- $ --
======== ======== ======== ======== ======== ======== ========
Net income (loss)...... $ 40,166 $ 9,166 $ 22,806 $(26,861) $ 12,850 $ 26,355 $ 12,447
======== ======== ======== ======== ======== ======== ========
Historical net income
(loss) per share:
Diluted net income
(loss) per share:
Continuing operations.. $ 0.37 $ 0.09 $ 0.30 $ (0.26) $ 0.26 $ 0.33 $ 0.15
Discontinued
operations............ 0.17 0.04 0.02 (0.16) (0.02) 0.12 0.07
Extraordinary item..... -- -- -- -- (0.02) -- --
-------- -------- -------- -------- -------- -------- --------
Total Diluted net
income (loss) per
share................. $ 0.54 $ 0.13 $ 0.32 $ (0.42) $ 0.22 $ 0.45 $ 0.22
======== ======== ======== ======== ======== ======== ========
Unaudited:
Pro forma net income
(loss) from continuing
operations............ $ 27,527 $ 4,149 $ 18,699 $(19,191) $ 11,398 $ 23,575 $ 12,409
======== ======== ======== ======== ======== ======== ========
Pro forma diluted net
income (loss) from
continuing operations
per share(2).......... $ 0.37 $ 0.06 $ 0.26 $ (0.30) $ 0.19 $ 0.40 $ 0.22
======== ======== ======== ======== ======== ======== ========
Shares used in computing
per share amounts(2):
Basic.................. 73,637 68,494 69,587 63,752 59,194 58,812 56,243
Diluted................ 74,932 71,066 72,012 63,752 59,992 58,903 56,243
Balance Sheet Data:
Total assets........... $826,118 $613,252 $382,137 $273,728 $193,928 $173,857
======== ======== ======== ======== ======== ========
Long-term debt......... $ 11,279 $ 12,283 $ 12,856 $ 36,028 $ 37,059 $ 27,240
======== ======== ======== ======== ======== ========
Redeemable ESOP
stock(3).............. $ 2,954 $ 2,960 $ 5,278 $ 2,452 $ 269 $ --
======== ======== ======== ======== ======== ========
Total equity........... $528,998 $357,378 $118,261 $ 67,123 $ 36,044 $ 22,851
======== ======== ======== ======== ======== ========
</TABLE>
- --------
(footnotes on next page)

10
<PAGE>

(footnotes continued from previous page)

(1) 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.
(2) 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.
(3) 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.

11
<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. For
all the periods presented, income (loss) from discontinued operations includes
the income (loss) from discontinued operations of the healthcare services
business which will be spun off to stockholders of record of Snyder
Communications on a date to be determined. For the years ended December 31,
1997 and 1996, the income (loss) from discontinued operations 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. Prior to their respective acquisitions, certain of the U.S.-
based acquirees were not subject to federal or state income taxes.
Consequently, 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. See also "SNC--Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "SNC--Business."

<TABLE>
<CAPTION>
For the Six
Months Ended June
30, 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........... $287,388 $223,359 $480,289 $ 397,505 $345,915 $286,435 $195,834
======== ======== ======== ========= ======== ======== ========
Income (loss) from
continuing
operations............ $ 29,619 $ 6,629 $ 21,362 $ (16,522) $ 15,691 $ 19,425 $ 8,641
======== ======== ======== ========= ======== ======== ========
Income (loss) from
discontinued
operations............ $ 12,639 $ 2,618 $ 1,446 $ (10,225) $ (1,415) $ 6,930 $ 3,806
======== ======== ======== ========= ======== ======== ========
Extraordinary item
(1)................... $ -- $ -- $ -- $ -- $ (1,216) $ -- $ --
======== ======== ======== ========= ======== ======== ========
Net income (loss)...... $ 42,258 $ 9,247 $ 22,808 $ (26,747) $ 13,060 $ 26,355 $ 12,447
======== ======== ======== ========= ======== ======== ========
Unaudited:
Pro forma historical
net income (loss) per
share (2):
Basic and diluted net
income (loss) per
share:
Continuing
operations.......... $ 0.41 $ 0.09 $ 0.29
======== ======== ========
Pro forma adjusted net
income (loss) from
continuing
operations............ $ 29,619 $ 4,109 $ 18,576 $(18,466) $ 11,915 $ 23,575 $ 12,409
======== ======== ======== ========= ======== ======== ========
Pro forma adjusted
basic and diluted net
income (loss) from
continuing operations
per share (2)......... $ 0.41 $ 0.05 $ 0.26
======== ======== ========
Shares used in computing
basic and diluted per
share amounts (2):..... 72,688 72,688 72,688
======== ======== ========
Balance Sheet Data:
Total assets........... $775,837 $601,416 $ 379,528 $272,441 $193,928 $173,857
======== ======== ========= ======== ======== ========
Long-term debt......... $ 11,279 $ 12,283 $ 12,856 $ 36,028 $ 37,059 $ 27,240
======== ======== ========= ======== ======== ========
Redeemable ESOP stock
(3)................... $ 2,954 $ 2,960 $ 5,278 $ 2,452 $ 269 $ --
======== ======== ========= ======== ======== ========
Investments and
advances from Snyder
Communications ....... $497,309 $350,093 $ 117,036 $ 66,507 $ 36,044 $ 22,851
======== ======== ========= ======== ======== ========
</TABLE>
- --------
(footnotes on next page)

12
<PAGE>

(footnotes continued from previous page)

(2) For all periods presented, basic EPS has been computed using the SNC shares
that will be issued upon the recapitalization based on the number of
outstanding Snyder Communications shares on August 26, 1999. Basic and
diluted EPS are the same for all years presented as there will be no SNC
options granted until the recapitalization.
(3) 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.

13
<PAGE>

CIRCLE.COM

SELECTED FINANCIAL DATA
(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.
There were no operations of circle.com prior to 1996. Historical financial
information may not be indicative of circle.com's future performance. The
operations of circle.com were contained within the Brann Worldwide and Arnold
Worldwide 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. Pro forma adjusted data are calculated as if
circle.com had been taxed similarly to a C corporation for all periods
presented. See also "Circle.com--Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Circle.com--Business."

<TABLE>
<CAPTION>
For the Six Months For the Years Ended
Ended June 30, December 31,
-------------------- -----------------------
1999 1998 1998 1997 1996
--------- --------- ------- ------ ------
(unaudited)
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Net revenues................... $12,347 $ 4,830 $13,514 $5,567 $3,308
Operating expenses:
Professional services......... 7,128 2,420 7,114 3,044 1,960
Office and general............ 7,017 2,291 5,902 3,621 2,176
--------- -------- ------- ------ ------
Income (loss) before income
taxes......................... (1,798) 119 498 (1,098) (828)
Income tax provision
(benefit)..................... 593 212 500 (968) (588)
--------- -------- ------- ------ ------
Net loss....................... $ (2,391) $ (93) $ (2) $ (130) $ (240)
========= ======== ======= ====== ======
Pro forma historical net loss
per share (unaudited) (1):
Basic and diluted net income
(loss) per share............. $ (0.11) $ -- $ --
========= ======== =======
Pro forma adjusted net income (loss) per
share
(unaudited) (1):
Basic and diluted net income
(loss) per share............. $ (0.11) $ -- $ 0.01
========= ======== =======
Shares used in computing net
income (loss) per share (1)..... 18,172 18,172 18,172
========= ======== =======
Balance Sheet Data:
Total assets................... $58,253 $13,697 $2,932 $1,441
========= ======= ====== ======
Investments and advances from
Snyder Communications......... $39,611 $ 9,106 $1,531 $ 770
========= ======= ====== ======
</TABLE>
- --------

(1) For all periods presented, basic EPS has been computed using the circle.com
shares that will be issued upon the recapitalization based on the number of
Snyder Communications shares outstanding on August 26, 1999. Basic and
diluted EPS are the same for all years presented as there will be no
circle.com options granted until the recapitalization.

14
<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.

The following is a summary of the material risks in connection with the
recapitalization proposal and ownership of SNC stock and circle.com stock. The
risk factors included through page 22 discuss risks arising from a capital
structure with two separate classes of common stock. Beginning on page 22, we
discuss risks which are common to both groups. Beginning on page 25, 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, as allocations of our assets and
liabilities between SNC and circle.com are only for financial reporting
purposes. Snyder Communications will continue to own all assets and be
responsible for all liabilities attributed to each group. 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.

Because of the connection between the groups and the risk that the assets of
one group could be used to satisfy the liabilities of the other group, each
group's financial condition may be affected by the other group's financial
condition. In turn, this may affect the market price of the common stock
relating to the groups. 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. Since the assets of each group would be available to satisfy the
liabilities of the other group, we do not expect the obligations of the two
groups to receive different credit ratings.

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 any merger, business combination or 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 following
circumstances:

15
<PAGE>

. 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 particular group;

. the payment of a dividend or distribution on the shares of a class
of common stock of one group in shares of the class of common stock
of the other group; or

. an increase or decrease in the number of authorized shares or the
par value of a class of common stock.

Limits exist on voting power of group stock.

In circumstances where the two classes of common stock vote together as a
single class, circle.com stock may not initially have any influence on the
outcome of stockholder voting.

We expect that initially the SNC stock will have enough votes to approve any
stockholder action where the SNC stock and the circle.com vote together as a
single class. This includes the election of directors, which requires the
approval of the holders of shares having a plurality of the outstanding voting
rights, and mergers, which require the approval of the holders of shares
having a majority of the outstanding voting rights. This is because the
relative voting power of the two classes will be affected by both market price
and number of outstanding shares. There will initially be four times the
number of shares of SNC stock outstanding as there will be shares of
circle.com stock outstanding. However, we do not anticipate that the per share
market price of the circle.com stock will initially be four times greater than
that of the SNC stock.

The number of votes per share of circle.com stock is determined by the ratio
of the average market value of a share of circle.com stock over the preceding
four calendar quarters (or such lesser period since the recapitalization was
implemented) to the average market value of a share of SNC stock over the same
period of time.

The market price of circle.com stock is likely to be extremely volatile as
the market for Internet-related and technology companies has experienced
extreme price and volume fluctuations in recent months. As a result, the
voting power of the circle.com stock is likely to fluctuate. We have provided
below examples of the voting power of the circle.com stock based on
hypothetical relative average market prices. The examples show the circle.com
stock trading at various market prices relative to the SNC stock and their
effect on circle.com stock's voting rights. Calculations are made using the
formula described above and assumes that there are four times the number of
shares of SNC stock outstanding as there are shares of circle.com stock
outstanding.

<TABLE>
<CAPTION>
Approximate
Relative Market Price Vote Per Share of Total Voting Power of
of circle.com Stock to SNC Stock circle.com Stock circle.com Stock
-------------------------------- ----------------- ---------------------
<S> <C> <C>
100% 1 20%
150% 1.5 27%
200% 2 33%
</TABLE>

Assuming the relative number of outstanding shares of the two classes of
common stock do not change, in order for the circle.com stock to have the same
percentage of votes as the SNC stock, the market price of the circle.com stock
would have to be four times that of the SNC stock. Accordingly, except in
limited circumstances requiring separate class voting, the shares of SNC stock
could control the outcome of any 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.

In circumstances where a separate class vote is required, the class of
common stock with less than majority voting power can block action.

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--

16
<PAGE>

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.

In circumstances where the two classes of common stock vote together,
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
where the holders of the classes of common stock vote together as a single
class.

Neither the business and affairs of SNC nor the business and affairs of
circle.com may be managed as they would be if the groups were separate
companies.

If the recapitalization is consummated, our directors and officers will be
required to manage the business and affairs of Snyder Communications, including
both SNC and circle.com, in the best interests of the corporation and its
stockholders as a whole. Our directors and officers will not be obligated to
prefer the interests of holders of SNC stock over those of holders of
circle.com stock, or vice versa, and may not be permitted to do so.

Under Delaware law, our directors and officers will have fiduciary duties to
both SNC stockholders and circle.com stockholders and, in general, will be
considered to have satisfied those duties if they have no conflicting personal
interest in the matter on which they act and act in good faith in a prudent
manner in what they reasonably believe to be the best interests of the
corporation and its stockholders as a whole. Absent a disabling conflict of
interest, directors will be presumed to have acted in accordance with this
standard. Consequently, on any matter where the interests of the SNC
stockholders diverge from, or conflict with, the interests of circle.com
stockholders, our directors and officers may balance the interests of the two
classes of common stockholders and act differently than they would if they were
directors or officers of SNC or circle.com and such group were a separate
company. In particular, our directors and officers may take action that would
be more or less favorable to the SNC stockholders or, alternatively, more or
less favorable to the circle.com stockholders than might be taken by the
directors and officers of a company that owned only SNC or circle.com.

Stockholders may not have the legal recourse against our directors and
officers which they would normally have in the case of a company having only
one class of common stock, where our directors and officers take action that is
not favorable to, or adverse to, the interests of one class of common
stockholders but that they reasonably believe to be in the best interests of
Snyder Communications and the holders of both classes of common stock as a
whole.

Our directors and officers may own more of the stock that tracks one group than
another.

We expect that our directors and officers will initially own shares of SNC
stock that will have a significantly greater market value than the shares of
circle.com stock that they will own, as we expect that, upon the
recapitalization, the outstanding shares of SNC stock will have a significantly
greater market value than the outstanding shares of circle.com stock. Our board
of directors currently anticipates implementing policies pursuant to which
most, if not all, directors and those officers whose responsibilities are not
limited to the business and affairs of one group will receive stock-based
compensation and incentives in both classes of common stock. Stock-based
compensation and incentives are expected to be roughly in proportion to the
aggregate market value of the outstanding shares of the classes of common
stock. However, there is no assurance that any director or officer will not
have a greater ownership interest in one class than in another and that the
difference will not be material to that individual. In these circumstances, the
individual may have a greater personal interest in the consequences of
corporate actions for one class than another. The ownership of different
amounts of the two classes of stock by a director or officer will not relieve
him of his fiduciary duty to act in the best interests of our company and our
common stockholders as a whole.

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<PAGE>

Our board of directors anticipates overseeing policies and practices for the
conduct of Snyder Communications' business and affairs reasonably designed to
assure that any material difference in ownership of stock does not improperly
affect corporate decision-making on matters where the interests of the holders
of SNC stock and the holders of circle.com stock diverge or conflict.

Numerous matters may arise in the conduct of the business and affairs of Snyder
Communications where the interests of SNC stockholders may conflict with the
interests of circle.com stockholders.

Our board of directors has discretion to allocate proceeds of the issuance
of circle.com stock to circle.com or SNC.

To the extent of SNC's retained interest in the circle.com group, our board
or directors may allocate the proceeds of an issuance of circle.com stock to
SNC for use in its operations or otherwise to benefit SNC stockholders through
dividends, stock repurchases or other means. In this event, none of the
proceeds may be available for use in the operations of circle.com or otherwise
to benefit circle.com stockholders and an opportunity to raise funds for these
purposes by issuing circle.com stock may be foregone. These issuances also
could adversely affect the trading price of circle.com stock.

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 and our bylaws will not
contain any provision governing how consideration to be received by common
stockholders 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, except where the merger or consolidation involves the
disposition by Snyder Communications of at least 80% in market value of the
assets of circle.com. For example, no provision has been made in the event of a
merger or consolidation which provides for common stockholders to receive a
cash payment in consideration for their shares to allocate that consideration
between holders of SNC stock and holders of circle.com stock. In addition,
neither the holders of SNC stock nor the holders of circle.com stock will be
entitled to vote as a separate class with respect to any merger or
consolidation in which Snyder Communications participates, including one which
adversely affects the rights, powers or privileges of a class of stock.

Our board of directors may allocate the consideration to be received by
common stockholders in a merger or consolidation as it determines in its
business judgement, as long as it acts in accordance with the fiduciary duties
of the directors to our company and our stockholders. The different ways in
which our board of directors may divide the consideration to be received by
common stockholders in connection with a merger or consolidation may have
materially different effects on the holders of SNC stock and the holders of
circle.com stock and could be materially less valuable than the consideration
they would have received if they had a 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 the exercise of its business judgment in
accordance with the directors' fiduciary duties to our company and our
stockholders, 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, in each case based on their relative market
values, at any time including when either or both classes of common stock may
be considered to be overvalued or undervalued. The determination of the number
of shares to be received in any conversion will include a premium factor unless
there is an adverse tax event, in which case there would be no premium factor
included in the calculation. A premium factor of 15% would be applied to the
average market price per share of SNC stock when converting the SNC stock into
circle.com stock. A premium factor of 25% would be applied to the average
market price per share of circle.com stock if a conversion of circle.com stock
into SNC stock occurs in the first quarter after issuance of the circle.com
stock. This premium factor would decline ratably each quarter after that over a
period of three years to 15%.

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<PAGE>

Any conversion that included a premium factor 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 common stock converted a greater or lesser
premium factor than any premium factor that was included or might be included
by a third-party buyer of all or substantially all of the assets of the group
whose stock is converted.

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.

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.

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 the exercise of its business judgment in
accordance with the directors' fiduciary duties to our company and our
stockholders, 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 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.

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. If a
transfer is accounted for as an increase or decrease in SNC's retained interest
in circle.com, the participation of the holders of SNC stock in the future
financial performance of circle.com would be increased or decreased

19
<PAGE>

accordingly. If a transfer is accounted for as a sale of assets from one group
to the other, the operating results of either or both groups may be affected.
This may have an effect on the trading prices of the stock of either or both
groups.

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 allocated to 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.

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 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.

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.

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. Because of SNC's 20%
retained interest in circle.com, if circle.com reflects a net loss, SNC will
record 20% of that loss on its own income statement. In this event, the sum of
the net income or loss of SNC and circle.com will be less than Snyder
Communications' income or loss. In addition, the market may value the
individual businesses of Snyder Communications differently than it did as a
whole.

20
<PAGE>

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. For
example, if SNC and circle.com were stand-alone companies, a person interested
in acquiring either company without negotiation with management could seek
control of the outstanding stock of that company by means of a tender offer or
proxy contest. A person interested in acquiring control of only one of the
groups without negotiation with Snyder Communications' management would still
be required to seek control of the voting power represented by all of the
outstanding capital stock of Snyder Communications entitled to vote on the
acquisition, including, possibly, the class of common stock of the other group.

In addition, provisions of Delaware law, our amended and restated certificate
of incorporation and our by-laws may also deter hostile takeover attempts.
Delaware law limits the ability of a holder of more than 15% of the outstanding
voting stock of a company from effecting various business combinations within
three years of the person becoming a 15% holder. Under Delaware law,
stockholders are not permitted to call a special meeting of stockholders unless
the company's certificate of incorporation or by-laws provide otherwise. Our
amended and restated certificate of incorporation and our by-laws do not permit
stockholders to call a special meeting.

Additionally, our amended and restated certificate of incorporation provides
that we may issue shares of preferred stock and additional shares of either
class of common stock. This could enable our board of directors to issue shares
to persons friendly to current management in order to discourage an attempt to
gain control of our company. It could also be used to dilute the stock
ownership of persons seeking to obtain control of our company.

The IRS could assert that the implementation of the recapitalization proposal
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 dividend and other features of the SNC stock and the
circle.com stock, including the voting redemption and conversion features. 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 as a dividend in an
amount equal to the fair market value of the stock and to us as a taxable
distribution and that the subsequent conversion of one common stock into the
other could be treated as a taxable sale or exchange to you. In neither event
will you receive any cash in the recapitalization with which to pay any
resulting tax.

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

21
<PAGE>

subject to tax on an issuance of SNC stock or circle.com stock on or 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.

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 is an adverse tax event.

We are paying our financial advisor a fee only if the recapitalization
proposal is approved. This may create a conflict of interest.

We are paying our financial advisor, Deutsche Bank Securities Inc. a fee of
$3.0 million only if the recapitalization proposal is approved. This might
create a conflict of interest regarding their advice relating to the
recapitalization proposal.

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.

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 six months
ended June 30, 1999, listed alphabetically, are Bell Atlantic, British Telecom,
Fleet Financial Group, GTE Communications, IBM, Liberty Mutual, McDonalds,
Procter & Gamble, Sainsbury's and Volkswagen of America. These clients
accounted for 33.9% of the revenues of SNC for the six months ended June 30,
1999. The ten largest current clients of circle.com, based on revenues for the
six months ended June 30, 1999, listed alphabetically, are Bell Atlantic,GTE
Communications, Healthcare Financing Administration, HSBC Holding, plc, IBM,
Merck, Peugeot, ServiceMaster, United Parcel Service and the Wall Street
Journal. These clients accounted for 58.2% of the revenues of circle.com for
the six months ended June 30, 1999. No single client of either SNC or
circle.com accounted for 10% or more of their respective revenues in the six
months ended June 30, 1999.

With few exceptions, both groups provide services on a project basis or under
one year contracts with automatic one year renewals. Clients may cancel these
contracts on short notice, with notice periods generally ranging from 30 to 90
days. 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.

22
<PAGE>

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.

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.

23
<PAGE>

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.

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 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. We cannot assure you that we will be
able to retain the services of Mr. Snyder and Ms. Snyder. 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 12.9% and 4.6%,
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.

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.

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<PAGE>

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 have
completed an assessment to determine whether a year 2000 problem exists at any
of our operations. Remediation and testing is complete at circle.com and at all
but one of SNC's operating subsidiaries. This subsidiary accounted for
approximately 7.2% of SNC's revenue in 1998. We expect to complete the
remaining year 2000 compliance work in November 1999. We believe that we are
year 2000 compliant with respect to all operations other than this SNC
subsidiary, which we believe will be year 2000 compliant by year end. 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.

Industry analysts and others have made many predictions concerning the growth
of the Internet as a business medium. We cannot assure you that these
predictions will be accurate. 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;

25
<PAGE>

. 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.

We have a history of losses and likely will need additional financing.

Circle.com has experienced operating losses, as well as net losses, since it
began operations. For the six months ended June 30, 1999, circle.com had a loss
of $2.4 million. From its inception through June 30, 1999, circle.com has
incurred cumulative losses of $2.8 million on $34.7 million of revenue.
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.

Until May 1999, the operations of circle.com were contained within the Brann
Worldwide and Arnold Worldwide divisions of Snyder Communications.

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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.

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<PAGE>

CAPITALIZATION

The tables below set forth the capitalization of Snyder Communications, SNC
and circle.com as of June 30, 1999 and as adjusted to give effect to the re-
classification of existing common stock into SNC stock and circle.com stock.
These tables should be read in conjunction with the historical financial
statements and related notes included elsewhere in this proxy statement and
prospectus.

Snyder Communications, Inc.

<TABLE>
<CAPTION>
As of June 30,
1999
------------------
Pro
Actual Forma
-------- --------
(in thousands)
<S> <C> <C>
Long-term debt:
Related party borrowings................................. $ 8,172 $ 8,172
Capital lease obligations................................ 1,491 1,491
Other debt............................................... 1,616 1,616
-------- --------
Total long-term debt..................................... 11,279 11,279
Redeemable ESOP stock...................................... 2,954 2,954
Equity:
Preferred stock, $.001 par value per share, 5,000 shares
authorized, none issued and outstanding at June 30,
1999.................................................... -- --
Existing common stock, $.001 par value, 400,000 shares
authorized, 76,522 shares issued and outstanding at June
30, 1999................................................ 77 --
SNC common stock, $.001 par value per share, 320,000
shares authorized, 76,522 pro forma shares issued and
outstanding at June 30, 1999............................ -- 77
circle.com common stock, $.001 par value per share,
80,000 shares authorized, 19,131 pro forma shares issued
and outstanding at June 30, 1999........................ -- 19
Additional paid-in capital............................... 511,256 511,237
Accumulated other comprehensive income (loss)............ (2,871) (2,871)
Retained earnings........................................ 20,536 20,536
-------- --------
Total equity............................................. 528,921 528,998
-------- --------
Total capitalization................................... $543,154 $543,231
======== ========
</TABLE>

SNC

28
<PAGE>

circle.com

<TABLE>
<CAPTION>
As of June 30,
1999
------------------
Actual Pro Forma
------- ---------
(in thousands)
<S> <C> <C>
Long-term debt............................................... $ -- $ --
Equity:
Other...................................................... 42,382 42,382
Retained earnings (deficit)................................ (2,763) (2,763)
Other comprehensive income (loss).......................... (8) (8)
------- -------
Total equity............................................... 39,611 39,611
------- -------
Total capitalization..................................... $39,611 $39,611
======= =======
</TABLE>

The amended and restated certificate of incorporation will permit us to pay
dividends on the 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 cannot exceed the available dividend amount for SNC. The
amended and restated certificate of incorporation will also permit us to pay
dividends on the circle.com stock, and to transfer corresponding amounts to SNC
in respect of its retained interest in circle.com, out of the assets legally
available for payment of dividends under Delaware law. However, the total
amount paid as dividends, plus the corresponding amounts transferred to SNC in
respect of SNC's retained interest in circle.com, cannot exceed the available
dividend amount for circle.com. The amended and restated certificate of
incorporation will provide that the available dividend amount for SNC and
circle.com, respectively, at any time is the amount that would then be legally
available for payment of dividends on SNC stock and circle.com stock under
Delaware law as if SNC were a separate Delaware corporation and circle.com were
a separate Delaware corporation. The amount legally available for payment of
dividends 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 stock and preferred stock. At the time of any dividend on the
outstanding shares of circle.com stock, we will credit SNC and charge against
circle.com, a corresponding amount in respect of SNC's retained interest in
circle.com. Also see page 44 of this proxy and prospectus.

For periods after the recapitalization, Snyder Communications will no longer
present a single earnings per share of common stock. Earnings per share of
common stock will be presented separately for SNC stock and circle.com stock in
the financial statements of Snyder Communications using the two-class method.
The two-class method is an earnings allocation formula that determines the
earnings per share for each class of common stock according to the
participation rights in undistributed earnings. For SNC stock, earnings per
share is calculated using earnings applicable to the SNC stockholders, which
includes its retained interest in circle.com. For circle.com stock, earnings
per share is calculated using earnings applicable to circle.com, which excludes
earnings allocable to SNC's retained interest.

29
<PAGE>

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 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.

You should rely only on the information provided 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.

30
<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 September , 1999.

Record Date

We have established August 31, 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 August 26, 1999, the most recent practicable date prior to
the date of this proxy statement and prospectus, we had issued and outstanding
72,688,315 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.

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.

31
<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.

If you hold shares through a broker, you should contact your broker to
determine the procedures through which you can vote on the recapitalization and
related proposals.

32
<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 our stockholders
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. SNC's
retained interest in circle.com will not be represented by actual shares of
circle.com stock. SNC will have no voting rights with respect to its retained
interest in circle.com. The "retained interest" is simply a way of describing
that portion of the equity value of circle.com that is attributable to SNC. The
percentage of circle.com's equity value represented by this retained interest
will change in the future if actions, such as issuances of additional shares of
circle.com stock, repurchases of shares of circle.com stock, or transfers of
cash or other property between SNC and circle.com, are taken that change the
total number of outstanding shares of circle.com stock.

The SNC stock and the circle.com stock are what are commonly referred to as
"tracking stocks," "targeted stocks" or "letter stocks," because each is
intended to reflect or "track" the separate performance of a business of Snyder
Communications. Tracking stock is an equity interest in a corporation with
rights determined by reference to the performance of specific assets of the
corporation.We will provide separate operating results and other business and
financial information with respect to SNC and circle.com. In addition, we have
established policies to assist us in allocating costs and charges between the
groups on an objective basis. We believe this will enable our stockholders to
gain a better understanding of the inherent value in each group.

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 reflect or "track" the performance of
circle.com, and we intend our SNC stock to reflect or "track" the performance
of SNC and its retained interest in circle.com.

Holders of SNC stock and circle.com stock will be stockholders of a single
company, Snyder Communications. As a result, stockholders will continue to be
subject to all of the risks of an investment in Snyder Communications.

We may convert SNC stock into circle.com stock or convert circle.com stock
into SNC stock, based on their relative market values, at any time following
implementation of the recapitalization proposal. This would have the effect of
reversing the recapitalization. The determination of the number of shares to be
received in any conversion will include a premium factor unless there is an
adverse tax event (as described more fully on page 48), in which case there
would be no premium factor included in the calculation. A premium factor of 15%
would be applied to the average market price per share of SNC stock when
converting the SNC stock into circle.com stock. A premium factor of 25% would
be applied to the average market price per share of circle.com stock if a
conversion of circle.com stock into SNC stock occurs in the first quarter after
issuance of the circle.com stock. This premium factor would decline ratably
each quarter after that over a period of three years to 15%.

By providing separate securities for each business, investors will be able to
invest in either or both securities depending upon their investment objectives.
In the event we determine to convert SNC stock into circle.com stock or convert
circle.com stock into SNC stock, the conversion premium is intended to
compensate our stockholders for the loss of their ability to invest in a
security that is intended to reflect separately the performance of the relevant
group.

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.

33
<PAGE>

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.

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. Our board of directors believes that the
historical price performance of our existing common stock has been more closely
linked to our direct marketing, advertising and communications business and
fails to reflect adequately the value of our Internet professional services
business. As a result, we believe our stockholders have been unable to realize
the full value of their shares. The exchange ratio of one share of SNC stock
and .25 of a share of circle.com stock for each outstanding share of existing
common stock was determined by our board of directors, based on advice from our
financial advisor, Deutsche Bank Securities Inc., in order to arrive at a per
share trading price for each class of capital stock that we believe would be
acceptable to the market.

The recapitalization proposal is designed to separate the performance of our
circle.com business from the rest of Snyder Communications. 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.

34
<PAGE>

Our principal reason for the recapitalization is to enhance the value of our
separate businesses. We believe that the recapitalization will improve our
ability to separately manage and monitor the performance of our businesses
because we will provide separate operating results and other business and
financial information with respect to each business. We believe this will
enable our separate management teams to focus greater attention on their
respective business. Further, we believe that by creating separate classes of
stock that may be used for stock options and stock ownership in the separate
groups, we will be able to provide more focused incentives for the individual
management teams. Because of these factors, we believe we will be better able
to accelerate the growth and development of circle.com. In addition, by
providing our stockholders with separate securities for our SNC and circle.com
businesses and financial statements that reflect the performance of each
business, investors will be able to invest in either or both securities
depending upon their investment objectives and, we believe, will be able to
gain a better understanding of the value inherent in these businesses.

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. 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:

. the tax consequences to Snyder Communications and the separate groups of
operating under the various alternatives;

. our assessment of capital markets acceptance of the alternatives and the
likelihood of success of the alternatives, based on our understanding of
these markets and consultations between members of the board of
directors and our financial advisor, Deutsche Bank Securities Inc., and
our counsel, Weil, Gotshal & Manges LLP;

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

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

Our board determined in its business judgment that retaining the SNC
business and the circle.com business within Snyder Communications would be the
best means of enhancing stockholder value, accomplishing our financial and
strategic objectives and creating flexibility for future growth. Retaining SNC
and circle.com within Snyder Communications will enable circle.com to take
advantage of the relatively greater capital resources and financing capacity
of SNC until circle.com is in a position to access all necessary capital on
its own. In addition, circle.com will benefit from continued access to the
established facilities and administrative, managerial and other business
resources of Snyder Communications. In turn, Snyder Communications will be
permitted to offset for income tax purposes against SNC's net income the net
losses likely to be generated by circle.com during the period of its
accelerated growth and development. These advantages would not be present if
circle.com were spun-off into a separate corporate entity.

Our board concluded that the potential advantages of the recapitalization
outweighed the advantages of preserving our current equity and operating
structure and the potential disadvantages of the recapitalization

35
<PAGE>

proposal. Preserving our current equity and operating structure would provide
to both groups the benefits of shared access to resources and consolidated
financing. However, our board determined that the recapitalization would
enhance the value of our separate businesses. The board considered the
potential disadvantages of the recapitalization proposal that would not be
present if our current equity and operating structure were retained, especially
the complexity of the capital structure, the costs of implementing the
structure and the potential difficulties associated with resolving conflicts
between the groups. The board concluded that the potential advantages of the
recapitalization proposal over retaining the current structure outweighed these
potential disadvantages.

In making this determination, our board of directors considered the
advantages that potentially could be realized in a spin-off of circle.com.
Similar to a recapitalization, a spin-off would permit circle.com to be
separately managed and would permit circle.com to separately monitor and report
its financial performance. A spin-off also would create a new common stock that
could be used to provide performance incentives for circle.com management and
for possible future acquisitions. Investors attracted to the investment
characteristics of circle.com could invest directly in shares of circle.com
following a spin-off. A spin-off of circle.com would have the additional
advantage that the assets of either group would not be available to satisfy
creditors or other liabilities of the other group. In the recapitalization,
liabilities of either group may be satisfied out of the assets of the other
group.

Our board of directors determined that the potential advantages of a spin-off
were outweighed by the greater advantages of retaining SNC and circle.com
within Snyder Communications. Our board of directors determined that creating
the SNC stock and circle.com stock in the recapitalization would permit Snyder
Communications to realize many of the same advantages of operating through
separate entities while retaining the benefits of preserving both groups within
Snyder Communications. Our board of directors identified the following
potential 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 and should result in more focused
coverage by securities analysts. 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 performance and
culture and to structure employee incentives which are tied directly to
the share performance of that group;

. the recapitalization proposal, in contrast to a spin-off, 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, we retain the ability to offer a wider range of services
to the customers of SNC and circle.com than would be possible if SNC and
circle.com were doing business as separate companies;

. the recapitalization proposal preserves our ability to undertake future
capital restructurings and business segmentation; 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

36
<PAGE>

board of directors determined that this disadvantage has been mitigated
(although not eliminated) because of the number of companies recently
adopting or proposing similar capital structures;

. the potential diverging or conflicting interests of the two groups and
the issues that could arise in resolving any conflicts. The board of
directors has established policies for the operation of the combined
businesses following the recapitalization to address instances of
conflict and to give fair consideration to all relevant interests in
making determinations in the best interests of Snyder Communications and
all of its stockholders as a whole;

. 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. The board of directors
had concluded for the reasons described above that retaining both SNC
and circle.com within Snyder Communications would be preferable to
spinning-off circle.com. In considering the advantages and disadvantages
of retaining both SNC and circle.com within Snyder Communications, the
board recognized that each group would be exposed to the risks of the
consolidated businesses;

. 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. The board of directors has
established management and allocation policies for the combined
businesses following the recapitalization to ensure that a process of
fair dealing governs the relationship between the groups and the means
by which the terms of any material transactions between them shall be
determined; and

. a recent legislative proposal by the Clinton Administration would impose
a corporate level tax on the issuance of stock similar to the SNC stock
and the circle.com stock. The board of directors considered the possible
impact of such legislation. Under the terms of the recapitalization
proposal, we may convert the SNC stock or the circle.com stock into
shares of the other class without any premium if there is an adverse tax
event (as described in detail on page 48), such as enactment of the
Clinton Administration proposal, notwithstanding that, by its terms, the
proposal would apply only to issuances on or after the date of
enactment.

Our board of directors determined, for the reasons summarized above, 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 confirmed its prior conclusions and
unanimously approved the recapitalization and the calling of the special
meeting.

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.

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
activities of SNC and circle.com, competition between the

37
<PAGE>

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 highlight
the separate financial performance of each of SNC and circle.com and to allow
each group to focus on its own business strategy and financial performance.
These policies establish guidelines to help us allocate costs and charges
between the two groups on an objective basis and to ensure that a process of
fair dealing governs the relationship between the groups and the means by which
the terms of any material transactions between them shall be determined.

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.

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

Under Delaware law, directors and officers are fiduciaries for the
corporation and its stockholders and, as such, have duties of loyalty and of
care. In general, directors and officers are considered to have satisfied these
duties when acting for the corporation if they do not have a conflicting
personal interest in the matter on which they act and act in good faith in a
prudent manner in what they reasonably believe to be the best interests of the
corporation and its stockholders. Absent a disabling conflict of interest,
directors are presumed to have acted in accordance with this standard. If the
recapitalization is consummated, our directors and officers will owe these same
duties to both the holders of SNC stock and the holders of circle.com stock, as
they currently do to holders of our existing common stock. Neither class of
common stockholder will be entitled to any higher degree of care or loyalty on
the part of a director or officer than the other class of common stockholder
nor will the interests of either such class be entitled to greater weight than
the interests of the other in the decision-making of the directors and
officers. Market values of the separate classes may be a relevant consideration
in the exercise of our board's business judgment.

The application of the fiduciary duties of directors and officers when acting
on matters as to which the interests of one class of common stockholders may
diverge from, or conflict with, the interests of another class of common
stockholders have not been definitively established. In connection with any
matters where the interests of holders of SNC stock may diverge from, or
conflict with, the interests of circle.com stockholders, our directors and
officers intend to act in accordance with their fiduciary duties under Delaware
law and, based on current law, intend to act in what they reasonably believe to
be the best interests of Snyder Communications and its common stockholders (of
both classes) as a whole, giving fair consideration to the interests of each
class.

We have established the policies relating to financing activities and
allocation matters, transfers of assets between the groups, and competition and
corporate opportunities to address the manner in which potentially divergent
interests of the groups relating to these matters will be resolved. Any matters
not addressed by these policies and any modification to these policies would be
considered by our board in light of the board's fiduciary duties to the
stockholders of both groups. Our board of directors has no present intention to
modify or rescind these policies or adopt any additional policies.

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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. We have set forth below
the policies established by our board of directors relating to the incurrence
of debt and stock issuances, the allocation of related costs and funds
transfers between the groups.

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, to the extent the proceeds are used for the benefit of SNC, and to
circle.com, to the extent the proceeds are used 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.

In either case, if we issue additional shares of circle.com stock, SNC's
retained interest in circle.com would be correspondingly decreased. This is
because the outstanding interest percentage will have increased in relation
to the retained interest percentage.

(3) 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.

(4) Circle.com's liquidity needs may be funded in the ordinary course of
business from:

. cash generated by circle.com's operations;

. additional issuances of circle.com stock;

. the proceeds of external debt incurred or issued for the benefit of
circle.com; or

. cash transfers from SNC.

Significant expenditures will be funded on a case by case basis as
determined by our board of directors.

(5) Snyder Communications will account for all cash transfers from one
group to or for the account of the other group 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.

These transfers do not include cash transfers in return for assets or
services rendered or cash transfers in respect of SNC's retained interest
that correspond to dividends paid on circle.com stock. There are no
specific criteria to determine when Snyder Communications will account for
a cash transfer as a long-term

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loan, a capital contribution or a return of capital rather than an inter-
group revolving credit advance. Snyder Communications would make that
determination at the time of the transfer, or the first of that type of
transfer, based upon all relevant factors, including:

. 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.

(6) Any cash transfer accounted for as an inter-group revolving credit
advance will bear interest at the rate at which Snyder Communications
determines that it 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 Snyder Communications determines
that it could borrow those funds.

(7) Any cash transfer from SNC to circle.com 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 could issue for
the account of SNC in respect of its retained interest will increase by the
amount of the capital contribution divided by the market value of
circle.com stock on the date of transfer. When determining the amount
available for payment of dividends on SNC stock, SNC's assets are deemed to
include the value of these shares.

This increase 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 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 of
circle.com that Snyder Communications could issue for the account of SNC in
respect of its 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 will result in a reduction of the
amount available for payment of dividends of SNC stock.

This decrease 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

SNC's principal business is direct marketing, advertising and communications.
Circle.com's principal business is Internet professional services. 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. The terms of any joint
transactions will be determined by our chief executive officer or, in
appropriate circumstances, our board of directors.

Our chief executive officer or, in appropriate circumstances, our board of
directors, may change this policy and decide 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;

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. 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

Except as described below, 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. The consideration for these asset transfers may be
paid by one group to the other in cash or other consideration, as determined
by our board of directors.

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. 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.

It is anticipated 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. This should allow us to
maintain a cohesive corporate identity and culture and allow employees of both
groups to participate in the long-term growth and financial success of Snyder
Communications as a whole.

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 in whole 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 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
accounting and allocation policies, each of which is reflected in the combined
financial statements of the respective groups included in this proxy statement
and prospectus:

. Specifically Identifiable Operating Expenses. Costs which relate
entirely to the operations of either SNC or circle.com are attributed
entirely to the respective business. These expenses consist of costs of
personnel who are 100% dedicated to the operations of either SNC or
circle.com, all costs associated with Snyder Communications locations
which conduct only the business of either SNC or circle.com and amounts
paid to third parties for work which is specifically identifiable to the
operations of either SNC or circle.com. All overhead costs which are
incurred at locations which conduct only the business of either SNC or
circle.com are also attributed entirely to the respective business.
These costs include on-site senior management, human resources, legal,
information technology, accounting and auditing, tax, treasury,
strategic planning, and any other overhead functions which occur at the
dedicated locations. In addition, any costs incurred in locations which
conduct the business of both SNC and circle.com and which are
specifically identifiable to the operations of one or the other business
are attributed to the respective business.

. Shared Operating Expenses. Certain company locations and personnel are
involved in conducting the business of both SNC and circle.com. In the
case of employees which are involved in both businesses, the employee
costs are allocated to SNC and circle.com based on estimated time spent
by the employees in the respective businesses. Facility costs fall into
two categories: (1) facility costs for space in which the actual
operations of SNC and circle.com are conducted; and (2) facility costs
for space in which the overhead activities of executive management,
human resources, legal, information technology, accounting and auditing,
tax, treasury, strategic planning functions and any other overhead
functions occur. In the case of facility costs for space in which the
actual operations of SNC and circle.com are conducted, the cost of the
space is allocated to SNC and circle.com based on square footage used by
each respective business. In the case of facility costs for space in
which overhead activities occur, the cost of the space is allocated to
SNC and circle.com based on time spent by the overhead employees on
matters relating to SNC and circle.com. Similarly, the other costs
associated with the overhead employees, such as depreciation of computer
and office equipment, employee travel and entertainment and other costs,
are allocated to SNC and circle.com based on time spent by the overhead
employees relating to matters of the respective divisions. As discussed
above, overhead costs at shared locations which are specifically
identifiable to the operations of SNC or circle.com are attributed
entirely to the respective business.

. Taxes. The federal income taxes of Snyder Communications and our
subsidiaries which own assets allocated between the groups are
determined on a consolidated basis. We will allocate consolidated
federal income tax provisions and related tax payments or refunds
between the groups based

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<PAGE>

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.
Any future amendments to our certificate of incorporation will require
stockholder approval. See "--Voting Rights--General Voting Rights."

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. The proportional interest in circle.com
represented at any time by the outstanding shares of circle.com stock is the
"outstanding interest percentage." The remaining proportional interest
represented by SNC's retained interest in circle.com is the "retained interest
percentage." SNC's retained interest in circle.com will not be represented by
actual shares of circle.com stock. SNC will have no voting rights with respect
to its retained interest in circle.com. The "retained interest" is simply a
way of describing that portion of the equity value of circle.com that is
attributable to SNC. The percentage of circle.com's equity value represented
by this retained interest will change in the future if actions, such as
issuances of additional shares of circle.com stock, repurchases of shares of
circle.com stock, or transfers of cash or other property between SNC and
circle.com, are taken that change the total number of outstanding shares of
circle.com stock. These actions, and the effect that they would have on the
holders of circle.com stock, are described further in this section and in our
amended and restated certificate of incorporation.

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 August 26, 1999, 72,688,315 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 August 26, 1999, 72,688,315 shares of SNC stock and
approximately 18,172,079 shares of circle.com stock will be issued and
outstanding.

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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. 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.

Our amended and restated certificate of incorporation will permit us to pay
dividends on the 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 cannot exceed the available dividend amount for SNC. It will
also permit us to pay dividends on the circle.com stock, and to transfer
corresponding amounts to SNC in respect of its retained interest in circle.com,
out of assets of Snyder Communications legally available for the payment of
dividends under Delaware law. However, the total amount paid as dividends, plus
the corresponding amounts transferred to SNC in respect of SNC's retained
interest in circle.com, cannot exceed the available dividend amount for
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.

If that amount is not greater than zero, a 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. These restrictions form
the basis for calculating the available dividend amounts for SNC and
circle.com. They 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). Accordingly, 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 the payment of dividends on
both series of common stock.

Our amended and restated certificate of incorporation will provide that 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 stock under Delaware law
as if SNC were a separate Delaware corporation. For purposes of this
calculation, the "total assets" of SNC are assumed to include the number of
shares of circle.com stock that Snyder Communications could issue to SNC with
respect to SNC's retained interest in circle.com.

Our amended and restated certificate of incorporation will provide that 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 as if circle.com were a separate Delaware corporation. For
purposes of this calculation, the number of outstanding shares of circle.com
stock are assumed to include that number of shares of circle.com stock that
Snyder Communications could issue to SNC with respect to SNC's retained
interest in circle.com.

Subject to these 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), our amended and restated certificate of
incorporation will provide that 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

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<PAGE>

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.

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 at least 80%
of the fair value of the assets attributed to circle.com, but excluding any
dividend payable in shares of circle.com stock), our amended and restated
certificate of incorporation will provide that 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.

Our amended and restated certificate of incorporation will provide that 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

If we dispose of at least 80% of the fair value of the assets attributed to
circle.com, our amended and restated certificate of incorporation will require
us to take action that returns the value of those assets to the holders of
circle.com stock. That action could take the form of:

. a dividend;

. a redemption of shares; or

. a conversion into shares of SNC stock.

Dividend. We may declare and pay to holders of circle.com stock a dividend in
cash, securities (other than SNC stock) or other property in an amount having a
fair value as of the date of the disposition equal to the circle.com
stockholders' proportionate interest in the net proceeds of the disposition.

Redemption of Shares. If the disposition involves all of the assets
attributed to circle.com, we may redeem all outstanding shares of circle.com
stock in exchange for cash, securities (other than SNC stock) or other property
having a fair value equal to the net proceeds of the disposition.

If, however, the disposition involves at least 80%, but less than 100%, of
the fair value of the assets attributed to circle.com, we may redeem a number
of shares of circle.com stock in exchange for cash, securities or other
property having a fair value equal to the net proceeds of the disposition. The
number of shares so redeemed shall have an aggregate average market value,
during the 20 consecutive trading day period beginning on the 16th trading day
following the disposition, closest to the net proceeds.

Conversion. We may convert each outstanding share of circle.com stock into a
number of shares of SNC stock equal to 110% of the ratio of the average market
value of one share of circle.com stock to one share of SNC stock during the 20
consecutive trading day period beginning on the 16th trading day following the
disposition.

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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.

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.
We will pay the dividend or complete the redemption or conversion on or prior
to the 85th trading day following the disposition.

If we choose to pay a dividend or effect a partial redemption of the sort
referred to above, at any time within one year after completing the dividend
or partial redemption, our amended and restated certificate of incorporation
will provide that we will have the right to issue shares of SNC stock in
exchange for the remaining outstanding shares of circle.com stock at 110% of
the ratio of the average market value of one share of circle.com stock to one
share of SNC stock during the 20 consecutive trading day period ending on the
fifth 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.

Our amended and restated certificate will not require us 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 disposition that results in Snyder Communications receiving in
consideration of those assets primarily equity securities (including,
capital stock, debt securities convertible into or exchangeable for equity
securities or interests in a general or limited partnership or limited
liability company) of any entity which:

. acquires the properties or assets or succeeds to the business
conducted with the properties or assets or controls the acquiror or
successor; and

. 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 the disposition, as determined by the board of
directors.

General Notice Provisions

Not later than the tenth trading day after the consummation of a disposition
of at least 80% of the assets attributed to circle.com, we will be required by
our amended and restated certificate of incorporation to 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) any adjustments to SNC's retained interest in circle.com.

We will also be required to 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.

We will also mail to each holder of circle.com stock the notices and other
information required by our amended and restated certificate of incorporation.
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

Our amended and restated certificate of incorporation will provide that 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 a premium factor multiplied by the ratio of:

(1) the average market price of a share of circle.com stock over a 20-
trading day period; to

(2) the average market price of a share of SNC stock over the same
period.

The premium factor will initially be 125% 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
factor will be fixed at 115%.

Similarly, we will have the right under our amended and restated certificate
of incorporation to convert all outstanding shares of SNC stock to shares of
circle.com stock at a conversion ratio equal to a premium factor of 115%
multiplied by the ratio of:

(1) the average market price of a share of SNC stock over a 20-trading
day period; to

(2) the average market price of a share of circle.com stock over the same
period.

We will calculate the ratio of average market values as of the fifth trading
day prior to the date we mail the conversion notice to holders.

These provisions of our amended and restated certificate of incorporation
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 can be
exercised 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.

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

Our amended and restated certificate of incorporation will provide that 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 average market price of a share of circle.com stock over a 20-
trading day period; to

(2) the average market price of a share of SNC stock over the same
period.

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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 average market price of a share of SNC stock over a 20-trading
day period; to

(2) the average market price of a share of circle.com stock over the same
period.

We will calculate the ratio of average market values as of the fifth trading
day prior to the date we mail the conversion notice to holders.

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 (as opposed to legislative) proposals will be adopted as
proposed. However, in the event a change in law is proposed, such as the
Clinton Administration's legislative proposal, tax counsel shall render an
opinion only in the event of enactment.

Optional Exchange for Stock of a Subsidiary

Our amended and restated certificate of incorporation will provide that 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 SNC's retained interest in circle.com is greater than zero, less than all
of the shares of common stock of the subsidiaries holding the assets and
liabilities of circle.com will be delivered to the holders of circle.com
stock). In this case, 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 of our amended and restated certificate of incorporation
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 may 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 of our Amended and
Restated Certificate of Incorporation

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.

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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 issue the
fractional shares or securities to the holder or pay cash in respect of the
fractional shares or securities. The amount of cash will equal the fair value
of the securities on the fifth trading day prior to the date the payment is to
be made, without interest.

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 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 end
of the calendar year 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 value of one share of 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 value of one share of SNC stock over the same
period.

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 quarterly,
as of the first day of each quarter, by the ratio of:

(1) the average market value of one share of circle.com stock over the
trading days of the previous four quarters or if shorter, for the period
beginning on the date of the initial issuance of the stock; to

(2) the average market value of one share of 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.

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.

The market price of circle.com stock is likely to be extremely volatile as
the market for Internet-related and technology companies has experienced
extreme price and volume fluctuations in recent months. As a result, the voting
power of the circle.com stock is likely to fluctuate. We have provided below
examples of the voting power of the circle.com stock based on hypothetical
relative average market prices. The examples show the circle.com stock trading
at various market prices relative to the SNC stock and their effect on
circle.com stock's voting rights. Calculations are made using the formula
described above and assumes that there are four times the number of shares of
SNC stock outstanding as there are shares of circle.com stock outstanding.

<TABLE>
<CAPTION>
Relative Market Price Vote Per Share Total Voting Power
of circle.com Stock of circle.com of circle.com
to SNC Stock Stock Stock
--------------------- -------------- ------------------
<S> <C> <C>
100% 1 20%
150% 1.5 27%
200% 2 33%
</TABLE>

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 for the limited class voting rights provided under
Delaware law, as described below, or as determined by our board of directors.

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.

As permitted under Delaware law, our amended and restated certificate of
incorporation will provide that 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.

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

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.

Attribution of Issuances of circle.com Stock

Whenever we decide to issue shares of circle.com stock, we intend to
attribute that issuance and the proceeds of that issuance to circle.com, in a
manner analogous to a primary offering of common stock. Our amended and
restated certificate of incorporation will provide that we may, however, in our
sole discretion, determine in the future to attribute the issuance 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.

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. See
"--Voting Rights--General Voting Rights." If we did so, we would attribute that
distribution to SNC in respect of its retained interest in circle.com. As a
result, SNC's retained interest in circle.com would be correspondingly
decreased.

If we instead 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 SNC's retained interest in circle.com.
As a result, the retained interest percentage and the outstanding interest
percentage would remain unchanged.

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<PAGE>

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 at least 80%
of the fair value of the assets attributed to circle.com, but excluding any
dividend payable in circle.com stock), our amended and restated certificate of
incorporation will provide that 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.

Repurchases of circle.com Stock

If we decide to repurchase shares of circle.com stock, we will attribute that
repurchase, including its cost, to circle.com, in a manner analogous to an
issuer repurchase. Our amended and restated certificate of incorporation will
provide that we may, however, in the future determine, in our sole discretion,
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.

In either case, the retained interest percentage would be increased and the
outstanding interest percentage would be correspondingly decreased. This is
because the number of shares outstanding will have decreased, but not the
amount of SNC's retained interest in circle.com.

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

Our amended and restated certificate of incorporation will provide that 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 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 retained interest percentage would be increased and the outstanding
interest percentage would be correspondingly decreased.

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 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.

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<PAGE>

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 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.

Future Audited Financial Information

If the recapitalization proposal is implemented, we will include in our
filings with the Commission the same audited financial information about Snyder
Communications that we currently include in our filings. This includes audited
consolidated balance sheets, statements of income, statements of equity and
comprehensive income and statements of cash flows. We also will include audited
combined balance sheets, statements of income, statements of equity and
statements of cash flows for each of SNC and circle.com. In addition, we will
include Management's Discussion and Analysis of Financial Condition and Results
of Operations for each of Snyder Communications, SNC and circle.com.

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.

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<PAGE>

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 existing
provisions 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 on or 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 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 are urged to 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.

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 other
features of the SNC stock and the circle.com stock, including the voting,
redemption and conversion features. 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

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<PAGE>

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, and thus are not able to render an
unqualified opinion on 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 the Code. If the redemption does not qualify under the tax-free spin-off
provisions 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 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 the Code and the United States Alien directly 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

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<PAGE>

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 is an adverse tax event. 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.

Stock Exchange Listing of the Common Stocks

We have applied to have the circle.com stock listed on the Nasdaq National
Market System under the symbol "CRCM." The NYSE has approved our application,
subject to stockholder approval of the recapitalization proposal, 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.

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 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.

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Financial Advisor

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 $3.0 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. 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.

No Regulatory Approvals

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

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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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 Ventiv Health, 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 Ventiv and then distributing
shares of Ventiv common stock to you. If you are a stockholder of record at the
close of business on , 1999, you will receive one share of Ventiv common
stock for every three shares of existing common stock you hold. There is
currently no public market for the Ventiv common stock, but we are seeking to
list the Ventiv common stock on the Nasdaq National Market System.

After the distribution, Ventiv will operate the healthcare services business
currently conducted by our healthcare services division. The healthcare
services business we currently operate and which Ventiv will operate after the
distribution is currently provided to clients in the pharmaceutical and life
sciences industry in the U.S. and Europe through three units: the Health
Products Research Division, Healthcare Communications Group and Contract Sales
Group.

We believe that separating the healthcare services business into a separate
public company will allow Ventiv to more closely tie compensation incentives
for Ventiv's employees to the performance of the healthcare marketing services
business, which is expected to help Ventiv attract and retain talented and
effective management and to motivate employees throughout the organization.
Further, the seperation will enhance Ventiv's ability to focus its business
strategies on the unique characteristics of its healthcare marketing business
and enable Ventiv to compete more effectively in the pharmaceutical and life
sciences industries. As a separate company, with its own management and
structure, Ventiv will no longer compete with Snyder Communications' other
businesses for Snyder Communications' available capital and will be able to
directly access the debt and equity markets for the funding necessary to
execute its business plans and strategies.

After the distribution, we will no longer own any Ventiv common stock.
However, we will enter into certain agreements with Ventiv to define our
ongoing relationship after the distribution. These agreements also will
allocate responsibility between Ventiv 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.

Snyder Communications expects to incur approximately $16 million of expenses
related to the spin-off of Ventiv.

58
<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 marketing services we are able to offer our
clients. This expansion has been accomplished by creating and initiating new
programs or service offerings and by acquiring businesses that offer
complementary services. Our strategy has been to grow our existing business and
to integrate services of our acquired companies with those of our existing
operations. 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 Brann Worldwide, Bounty SCA Worldwide and Arnold Worldwide networks. Brann
Worldwide provides direct marketing and sales services for its clients, such as
direct mail advertising. Bounty SCA Worldwide distributes product samples and
other advertising materials for its clients. Arnold Worldwide operates SNC's
advertising and public relations operations. We strive to integrate our service
capabilities within, as well as across, our networks. 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 Brann Worldwide, 8,983,714 were to companies that operate through
Bounty SCA Worldwide and 3,489,539 were to companies that operate through
Arnold Worldwide. We plan to focus on internal growth for the foreseeable
future as the primary means of expanding SNC and circle.com, although we will
consider attractive acquisition opportunities as they arise.

The sum of the net income or loss of circle.com and SNC will not equal the
net income or loss of Snyder Communications. SNC will have a 20% retained
interest in circle.com and, in accordance with generally accepted accounting
principles, SNC initially will reflect 20% of the net income or loss of
circle.com in its own income statement. If circle.com reflects a net loss, then
SNC will record 20% of the circle.com loss on its own income statement to
reflect a loss on its 20% retained interest. In that case, the sum of net
income or loss of circle.com and SNC will be less than Snyder Communications'
income or loss. If circle.com reflects a net income, then SNC will record 20%
of the circle.com income on its own income statement to reflect income on its
20% retained interest. In that case, the sum of the net income or loss of
circle.com and SNC will be more than Snyder Communications' income or loss.

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.

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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.

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. 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 Six Months Ended For the Years Ended
June 30, December 31,
-------------------------------- --------------------------------------------------
1999 1998 1998 1997 1996
--------------- --------------- --------------- --------------- ---------------
(unaudited) (dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenues............ $299,426 100.0% $228,189 100.0% $493,803 100.0% $403,072 100.0% $349,223 100.0%
Operating expenses:
Cost of services........ 200,736 67.0 149,492 65.5 322,980 65.4 273,899 68.0 236,793 67.8
Selling, general and
administrative
expenses............... 51,134 17.1 48,008 21.0 96,362 19.5 93,371 23.2 77,705 22.3
Compensation to
stockholders........... -- -- 382 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.................. 1,382 0.5 22,597 9.9 38,941 7.9 31,389 7.8 -- --
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Income (loss) from
operations............. 46,174 15.4 7,710 3.4 34,947 7.1 (13,420) (3.4) 23,233 6.6
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Interest expense........ (696) (0.2) (1,014) (0.4) (1,753) (0.4) (3,178) (0.8) (5,385) (1.5)
Investment income....... 1,237 0.4 1,614 0.7 3,638 0.7 2,944 0.7 2,371 0.7
Income tax provision.... 19,188 6.4 1,762 0.8 15,472 3.1 2,982 0.7 4,738 1.4
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Income (loss) from
continuing operations.. 27,527 9.2 6,548 2.9 21,360 4.3 (16,636) (4.2) 15,481 4.4
Income (loss) from
discontinued
operations............. 12,639 4.2 2,618 1.1 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)....... $ 40,166 13.4% $ 9,166 4.0% $ 22,806 4.6% $(26,861) (6.7)% $ 12,850 3.7%
======== ===== ======== ===== ======== ===== ======== ===== ======== =====
Pro forma net income
(loss)................. $ 40,166 13.4% $ 6,767 3.0% $ 20,145 4.1% $(30,792) (7.6)% $ 6,558 1.9%
======== ===== ======== ===== ======== ===== ======== ===== ======== =====
</TABLE>

Six Months Ended June 30, 1999, Compared to Six Months Ended June 30, 1998

Revenues. Our revenues increased $71.2 million, or 31.2%, to $299.4 million
in the first half of 1999 from $228.2 million in the same period in 1998.
Revenues of Brann Worldwide increased $31.1 million, or 24.3%, for the six
months ended June 30, 1999 as compared to the same period in 1998 due to
increased levels of service provided to both new and existing clients in the
U.S. and U.K. This increase accounted for 43.7% of the total increase in
revenues for the six months ended June 30, 1999. Revenues of Bounty SCA
Worldwide increased $28.3 million, or 77.7%, for the six months ended June 30,
1999 as compared to the same period in 1998 as a result of increased sampling
program activities and the purchase of Media Syndication Global ("MSG") in
March 1999, which accounted for $15.6 million of the increase. Bounty SCA's
increase in

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revenues accounted for 39.7% of the total increase in revenues for the six
months ended June 30, 1999. Revenues of Arnold Worldwide increased $4.6
million, or 7.8%, for the first half of 1999 as compared to the same period in
1998 due to increase in creative and advertising services provided to existing
and new clients. This increase accounted for 6.5% of the total increase in
revenues for the six months ended June 30, 1999. Revenues of circle.com
increased $7.5 million, or 156%, for the first half of 1999 as compared to the
same period in 1998 as a result of increases in service provided to both new
and existing clients and from purchase transactions completed during 1998.

Cost of services. Our cost of services increased $51.2 million, or 34.2%, to
$200.7 million in the first half of 1999 from $149.5 million in the first half
of 1998. Cost of services as a percentage of revenues increased to 67.0% for
the six months ended June 30, 1999 from 65.5% for the same period in 1998. The
dollar fluctuation in cost of services at our various operating units
corresponds to the revenue changes discussed above. Cost of services within the
Brann Worldwide network increased $21.1 million, or 24.5%, in the first half of
1999 and accounted for 41.0% of the total increase in cost of services. As a
percentage of revenues, Brann Worldwide's cost of services remained constant
between the first half of 1999 and the same period in 1998 at 67.3% for both
periods. Brann Worldwide's cost of services as a percentage of revenues was
favorably impacted in 1999 by a fee of $3.8 million, net of related expenses,
that was received for termination of certain services under an existing
contract. Cost of services within the Bounty SCA Worldwide network increased
$21.4 million, or 108.7%, for the six months ended June 30, 1999 due, in part,
to the purchase of MSG in March 1999, which accounted for $11.6 million of the
increase. Bounty SCA's increase in cost of services accounted for 41.8% of the
total increase in cost of services. As a percentage of revenues, Bounty SCA's
cost of services for the six months ended June 30, 1999 increased to 63.5% from
54% for the corresponding period in 1998 primarily as a result of the purchase
of MSG. MSG has a higher cost of services as a percentage of revenues than
Bounty SCA's other businesses. Cost of services within the Arnold Worldwide
network increased $3.3 million, or 8.0%, for the six months ended June 30, 1999
and accounted for 6.5% of the total increase in cost of services. Arnold
Worldwide's cost of services as a percentage of revenues remained relatively
constant between the first half of 1999 and the same period in 1998 at 69.3%
and 69.1%, respectively. Cost of services within circle.com increased for the
six months ended June 30, 1999 compared to June 30, 1998 due to increase in
service provided to new and existing clients and from purchase transactions in
1998.

Selling, General and Administrative Expenses. Our selling, general and
administrative expenses increased $3.1 million, or 6.5%, to $51.1 million in
the first half of 1999 from $48.0 million in the first half of 1998 as a result
of the growth in revenues discussed above. Selling, general and administrative
expenses as a percentage of revenues decreased to 17.1% for the six months
ended June 30, 1999 from 21.0% for the same period in 1998 as a result of the
close monitoring and containment of these expenses as our revenues have
increased and the lower proportional increase in selling, general and
administrative expenses necessary to support the growth.

Compensation to Stockholders. No compensation to stockholders was recorded in
the six months ended June 30, 1999. Compensation to stockholders was $0.4
million in the six months ended June 30, 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 $1.4 million in acquisition and
related costs during the six months ended June 30, 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 six months
ended June 30, 1998, and these costs were related to the consummation of
pooling of interests transactions during the six months ended June 30, 1998. We
completed three pooling of interests transactions valued at approximately $206
million during the six months ended June 30, 1998.

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<PAGE>

Interest Expense. Our interest expense decreased $0.3 million, or 30.0%, to
$0.7 million in the first half of 1999 from $1.0 million in the first half of
1998. The decline was attributable primarily to the repayment of debt of
companies that were acquired by us in 1998 through pooling-of-interests
combinations. If we increase our borrowing levels to acquire companies,
repurchase our stock or for other purposes, interest expense will increase in
future periods.

Investment Income. We recorded $1.2 million of investment income in the first
half of 1999 and $1.6 million of investment income in the first half of 1998.
Investment income varies based on the amount of cash and cash equivalents
available for investment during the periods.

Income Tax Provision. We recorded a tax provision of $19.2 million in the six
months ended June 30, 1999. Our effective tax rate on our recurring operations
is approximately 40.1% for the six months ended June 30, 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.

Income (Loss) from Continuing Operations. Our income from continuing
operations increased $21.0 million to $27.5 million in the first half of 1999
from $6.5 million in the first half of 1998, due primarily to our overall
growth, improved operating margins and a significant decrease in nonrecurring
acquisition and related costs, as well as the close monitoring and containment
of overhead costs. In the second half of 1999, we expect to incur approximately
$7 million of expenses related to the recapitalization proposal and
approximately $16 million related to the healthcare services spin-off. These
expenses consist primarily of financial advisory fees, legal, accounting, SEC
registration fees and printing fees. We expect that the estimated $7 million of
expenses related to the recapitalization will have an impact on our income from
continuing operations for the year ending December 31, 1999. In addition, our
intention to focus on internal growth for SNC, circle.com and Ventiv as the
primary means of growth is a shift from our past acquisition growth pattern. To
facilitate our growth, we intend to invest over $20 million into our business
in the next 12 to 18 months to promote our brands, further enhance the skills
of our employees, further our business development efforts, and to make further
investment in technology. We expect that this additional investment to expand
our business will cause an increase in our expenses over that period.

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 Ventiv have been
classified as discontinued operations. Ventiv reported net income of $12.6
million and $2.6 million in the first half of 1999 and 1998, respectively. Net
income from the discontinued healthcare operations increased due to the overall
growth within healthcare services, a one time $2.0 million reduction in the
estimated amount of employee related social charges to be paid as a result of
the integration of our French sales force and the decrease in nonrecurring
acquisition and related costs. We expect to reflect the estimated $16 million
of costs related to the healthcare securities spin-off in the results from
discontinued operations when the spin-off occurs.

Net Income (Loss). Our net income increased $31.0 million to $40.2 million in
the first half of 1999 from $9.2 million in the first half of 1998 due
primarily to our overall growth as discussed above and the decrease in
nonrecurring acquisition and related costs.

We have agreed to provide incremental consideration for the acquisition of
MSG and PromoTech Research Associates based on the average trading price of SNC
stock, circle.com stock, and Ventiv stock for the twenty trading days ending
October 15, 1999 (or a such lesser number of days that a public market exists
for the securities up to October 15, 1999). Based on the closing price of the
Snyder Communications stock on August 28, 1999, the amount of such payment
would result in non-cash expense of (1) approximately $10 million, payable in
SNC stock, and (2) approximately $4.3 million, payable in Ventiv stock.

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Pro Forma Net Income (Loss). Pro forma net income (loss) shows the effect on
net income (loss) assuming all of our operations were taxed as C corporations
for the six months ended June 30, 1999 and 1998, respectively. Pro forma net
income (loss) is worse than net income (loss) in the first half of 1998. In the
first half 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 half of 1998 includes benefits from the S corporation status of certain
entities prior to our acquisition of them. Pro forma net income increased
$33.4 million to $40.2 million in the first half of 1999 from $6.8 million in
the first half 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.

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. Revenues of Brann Worldwide increased
$49.8 million, or 21.4%, for the year 1998 as compared to 1997 as a result of
increased marketing services provided to new and existing clients in the U.S.
and U.K. offset by a $12.9 million decline in revenues from the sale of long
distance service in the U.S. This change resulted from the start up of a new
contract for similar services provided to a previous customer in 1997. Brann
Worldwide's increase in revenues accounted for 54.9% of the 1998 total increase
in revenues. Revenues of Arnold Worldwide increased $24.5 million, or 25.9%,
for the year 1998 as compared to 1997 due to increase in creative and
advertising services to existing and new clients. This increase accounted for
27% of the total increase in revenues during 1998. Revenues of Bounty SCA
Worldwide increased $8.5 million, or 12.2%, for the year 1998 as compared to
1997 as a result of increased distribution of product sample and other
advertising materials. Bounty SCA's increase in revenues accounted for 9.4% of
the 1998 total increase in revenues. Revenues for circle.com increased $7.9
million, or 141%, for the year 1998 as compared to 1997. This increase is due
to approximately $2.4 million of revenue growth from purchase transactions
completed in 1998 as well as growth in its client base in both the U.S. and the
U.K. Circle.com's increase in revenues accounted for 8.7% of the 1998 increase
in revenues.

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 as a result of the increased
revenues discussed above. Cost of services as a percentage of revenues
decreased to 65.4% in 1998 from 68.0% in 1997. Cost of services within the
Bounty SCA Worldwide network increased $8.0 million, or 22.6%, in 1998 and
accounted for 16.2% of the total increase in cost of services. The increase in
cost of services is consistent with the revenue change discussed above. Bounty
SCA's cost of services as a percentage of revenues for the year 1998 increased
to 55.2% from 50.5% for the year 1997. Cost of services within the Brann
Worldwide network increased $26.9 million, or 16.8%, in 1998 and accounted for
55% of the total increase in cost of services. As a percentage of revenues,
Brann Worldwide's cost of services for the year 1998 decreased to 65.9% from
68.5% for the year 1997 due to the ability of existing client support personnel
within the network to handle its growth. Cost of services within the Arnold
Worldwide network increased $9.1 million, or 12.1%, in 1998 and accounted for
18.5% of the total increase in cost of services. Arnold Worldwide's cost of
services as a percentage of revenues for the year 1998 decreased to 71.1% from
79.8% for the year 1997 due to a change in the overall mix of services provided
within the Arnold Worldwide network. Cost of services within circle.com
increased for the year 1998 compared to the year 1997 due to purchase
transactions in 1998 and an increase in service provided to new and existing
clients.

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 as a result of the growth in revenues discussed
above. 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 and
the lower proportional increase in selling, general and administrative expenses
necessary to support the growth. In addition, we have monitored and contained
overhead costs closely in all of our operations.

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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.

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 net 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 net 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.

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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.

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 Net Income (Loss). Pro forma net income (loss) shows the effect on
net income (loss) assuming all of our operations were taxed as C corporations
for all of 1998 and 1997. Pro forma net income (loss) is worse that net income
(loss) for 1998 and 1997. 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.

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. Revenues of Bounty SCA Worldwide increased $21.4 million, or 44.0%, for
the year 1997 as compared to 1996 as a result of increased distribution of
product samples and other advertising materials for clients. This increase in
revenues accounted for 39.7% of the 1997 total increase in revenues. Revenues
of Brann Worldwide increased $13.6 million, or 6.2%, for the year 1997 as
compared to 1996 due to increased levels of service provided to both new and
existing clients in the U.S. and U.K. Brann Worldwide's increase in revenues
accounted for 25.2% of the total increase in revenues during 1997. Revenues of
Arnold Worldwide increased $16.6 million, or 21.3%, for the year 1997 as
compared to 1996 as a result of increased creative and advertising services
provided to clients. This increase accounted for 30.8% of the total 1997
increase in revenues. Revenues of circle.com increased $2.3 million, or 79%,
for the year 1997 as compared to 1996 due to increases in service provided to
both new and existing clients. Circle.com's increase in revenues accounted for
4.3% of the total increase in revenues during 1997.

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 as a result of the increased
revenues discussed above. Cost of services as a percentage of revenues remained
consistent at 68.0% in 1997 and 67.8% in 1996. Cost of services within the
Bounty SCA Worldwide network increased $8.3 million, or 30.5%, in 1997 and
accounted for 22.3% of the total increase in cost of services. Bounty SCA's
cost of services as a percentage of revenues for the year 1997 deceased to
50.5% from 55.7% for the year 1996 due to the overall growth within the network
and the ability of the client support personnel to handle increased client
services. Cost of services within the Arnold Worldwide network increased $14.7
million, or 24.3%, in 1997 and accounted for 39.6% of the total increase in
cost of services. This increase in cost of services corresponds to the revenue
change discussed above. As a percentage of revenues, Arnold Worldwide's cost of
services for the year 1997 increased to 79.8% from 77.9% for the year 1996.
Cost of services within the Brann Worldwide network increased $12.8 million, or
8.7%, in 1997 and

65
<PAGE>

accounted for 34.5% of the total increase in cost of services. The increase in
cost of services is consistent with the increase in services provided. Brann
Worldwide's cost of services as a percentage of revenues for the year 1997
increased to 68.5% from 66.9% for the year 1996. Cost of services within
circle.com increased for the year 1997 compared to the year 1996 due to
increase in service provided to both new and existing clients.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $15.7 million, or 20.2%, to $93.4 million in
1997 from $77.7 million in 1996 as a result of the increased revenues discussed
above. 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.

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 Expense. 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

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<PAGE>

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 Ventiv and a loss of $1.5 million from
BWA. The loss from discontinued operations in 1996 consisted of $0.1 million in
income from Ventiv offset by a $1.5 million loss from BWA. Ventiv's 1997 loss
was due primarily to the nonrecurring acquisition and related costs and the
recapitalization costs recorded in 1997.

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 Net Income (Loss). Pro forma net income (loss) shows the effect on
net income (loss) assuming all of our operations were taxed as C corporations
for all of 1997 and 1996. Pro forma net income (loss) is worse than net income
(loss) in 1997 and 1996. 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.

Liquidity and Capital Resources

At June 30, 1999, we had $48.6 million in cash and equivalents. Cash and
equivalents increased $0.7 million during the six months ended June 30, 1999,
due to the $21.7 million provided by operating activities, the $35.5 million
provided by financing activities, the $1.0 million effect of changes in the
exchange rate, offset by the $46.3 million used in investing activities and the
$11.2 million used by discontinued operations. The $35.5 million in cash
provided by financing activities consists primarily of additional borrowings
for acquisitions and the proceeds received from the exercise of stock options.
The $46.4 million in cash used in investing activities consists primarily of
cash used for business acquisitions and capital expenditures. The $11.2 million
in cash used by discontinued operations is primarily driven by $10.8 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 of our existing
business over the next 12 months and beyond.

If we acquire additional businesses in transactions that include cash
payments as part of the purchase price, both in the short-term and the long-
term, we will first use excess cash available from operations and then pursue
additional debt or equity financing as sources of cash necessary to complete
the acquisitions. In August 1999, we entered into a $195 million unsecured
revolving credit facility with a term of four years for acquisitions and
general corporate purposes, as well as the repurchase of up to $200 million of
Snyder Communications common stock that the board of directors has previously
approved. Interest on amounts borrowed under the credit facility is based on
the London Interbank Offered Rate, the lending bank's base rate of interest or
the federal funds rate. Availability under this credit facility is subject to
our compliance with various financial ratios, operating covenants and other
customary conditions. On August 28, 1999, there was $90 million in outstanding
borrowings under the credit facility.

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<PAGE>

Of the $200 million approved stock buyback, $100 million is authorized only
for the repurchase of shares to be reissued in specifically identified purchase
business combinations. In July and August of 1999 through August 26, 1999, we
repurchased 3,915,300 shares of our existing common stock for a total of $72.1
million and returned those shares to our corporate portfolio. In addition to
borrowing under the line of credit we could pursue other debt or equity
transactions to finance our acquisitions, depending on market conditions.
However, there can be no assurance that we will be successful in raising the
cash required to complete all acquisition opportunities which we may seek in
the future.

We have completed an assessment of our current systems and equipment and are
in the process of finalizing modifications necessary to address the issues
presented by the year 2000. Remediation and testing are complete at circle.com
and at all but one of SNC's operating subsidiaries. This subsidiary accounted
for approximately 7.2% of SNC's revenue in 1998. We expect to complete the
remaining year 2000 compliance work in November 1999. We believe that we are
year 2000 compliant with respect to all operations other than this SNC
subsidiary, which we believe will be year 2000 compliant by year end. 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 $2.6 million was incurred through June 30, 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
achieved at the remaining subsidiary by January 1, 2000, we will implement our
contingency plan which has already been tested at the subsidiary.

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.

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

Long-Term Debt Exposure

For purposes of quantifying our potential loss in fair value of our long-term
debt due to changes in interest rates, we used a sensitivity analysis model.
While there is exposure related to the fair market value of our fixed rate
debt, we believe that changes in market interest rates over the next year would
not materially impact our earnings or cash flows as the interest rates on
substantially all of our long-term debt is fixed. We only have $0.3 million of
debt which carries a variable rate of interest. Therefore, we believe that
fluctuations in interest rates will not materially impact our financial results
as the amount of debt effected is not material. The weighted average maturities
of all outstanding long-term debt as of December 31, 1998 is four years. To
determine potential changes in the fair value of our fixed-rate long term debt,
we assumed a hypothetical 150

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<PAGE>

basis point increase/decrease to all interest rates on our outstanding long-
term debt at December 31, 1998. If interest rates change as hypothetically
assumed, the fair value of our debt will change as follows (in thousands):

<TABLE>
<CAPTION>
Fair Value Fair Value
Carrying with 150 with 150
Amount Basis Basis
December Fair Point Point
31, 1998 Value (1) Increase (2) Decrease (2)
-------- --------- ------------ ------------
<S> <C> <C> <C> <C>
Long-term debt (fixed rate)....... $12,283 $12,488 $11,833 $13,187
</TABLE>
- --------

(1) Fair value is calculated using the discounted cash flows method.

(2) Basis point change is assumed on all interest rates of outstanding debt.

Foreign Currency Exchange Rate Exposure

Fluctuations in foreign currency exchange rates affect the reported amounts
of our assets, liabilities and operations. For purposes of quantifying the risk
associated with fluctuations in the foreign exchange rate, we used a
sensitivity analysis model. We assumed a hypothetical detrimental change of 10%
in the exchange rates on our assets, liabilities and revenues denominated in a
foreign currency. A 10% fluctuation was assumed for all exchange rates at
December 31, 1998. Our material exposure to foreign exchange rate fluctuations
on continuing operations is the British pound. Approximately 95% of our 1998
continuing revenues from international operations were conducted in the United
Kingdom. The amounts below represent the impact of all exchange rates on our
total assets, liabilities and revenues.

<TABLE>
<CAPTION>
10% Decrease in value
Balance at of Local Currencies to
December 31, 1998 U.S. Dollar
----------------- ----------------------
<S> <C> <C>
Assets................................. $613,252 $596,967
Liabilities............................ $255,874 $243,543
Revenue................................ $493,803 $478,757
</TABLE>

The following illustrates the impact on the fair value of all of our long-
term fixed rate debt assuming a 10% fluctuation in all of our foreign exchange
rates (in thousands).

<TABLE>
<CAPTION>
Fair Value with 10% Fair Value with 10%
Fair Value increase in strength of decrease in strength of
December 31, 1998 U.S. dollar to foreign U.S. dollar to foreign
----------------- ----------------------- -----------------------
<S> <C> <C> <C>
Long-term debt (fixed
rate).................. $12,488 $11,635 $13,529
</TABLE>

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<PAGE>

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

Overview

SNC provides direct marketing and advertising services throughout the United
States, the United Kingdom and continental Europe. SNC consists of the Brann
Worldwide, Bounty SCA Worldwide and Arnold Worldwide networks. Brann Worldwide
provides direct marketing and sales services for its clients, such as direct
mail advertising. Bounty SCA distributes product samples and other advertising
materials for its clients. Arnold Worldwide 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 Brann Worldwide, 8,983,714 shares were to companies that operate
through Bounty SCA and 3,489,539 shares were to companies that operate through
Arnold Worldwide. SNC believes the complementary services it is able to offer
to its customers as a result of its acquisitions have increased its
opportunities and strengthened its client relationships. We plan to focus on
internal growth for the foreseeable future as the primary means of expanding
SNC, although we will consider attractive acquisition opportunities as they
arise.

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. 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.

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<PAGE>

As presented in the following table, SNC has a 20% retained interest in
circle.com and, in accordance with generally accepted accounting principles,
SNC reflects 20% of the net income or loss of circle.com in its own income
statement. The sum of the net income or loss of circle.com and SNC will not
equal the net income or loss of Snyder Communications. If circle.com reflects a
net loss, then SNC will record 20% of the circle.com loss on its own income
statement to reflect a loss on its 20% retained interest. In that case, the sum
of net income or loss of circle.com and SNC will be less than Snyder
Communications' income or loss. If circle.com reflects a net income, then SNC
will record 20% of the circle.com income on its own income statement to reflect
income on its 20% retained interest. In that case, the sum of the net income or
loss of circle.com and SNC will be more than Snyder Communications' income or
loss.

<TABLE>
<CAPTION>
For the Six Months Ended For the Years Ended
June 30, December 31,
-------------------------------- --------------------------------------------------
1999 1998 1998 1997 1996
--------------- --------------- --------------- --------------- ---------------
(unaudited) (dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenues............ $287,388 100.0% $223,359 100.0% $480,289 100.0% $397,505 100.0% $345,915 100.0%
Operating expenses:
Cost of services........ 192,183 66.9 146,416 65.5 314,255 65.4 270,268 68.0 234,526 67.8
Selling, general and
administrative
expenses............... 45,851 16.0 46,373 20.8 92,071 19.2 90,555 22.8 75,950 22.0
Compensation to
stockholders........... -- -- 382 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.................. 1,382 0.5 22,597 10.2 38,941 8.1 31,389 7.9 -- --
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Income (loss) from
operations............. 47,972 16.6 7,591 3.3 34,449 7.2 (12,322) (3.1) 24,061 7.0
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Interest expense........ (696) (0.2) (1,014) (0.5) (1,753) (0.4) (3,178) (0.8) (5,385) (1.6)
Investment income....... 1,237 0.4 1,614 0.7 3,638 0.8 2,944 0.8 2,371 0.7
Loss related to retained
interest
in circle.com.......... (478) (0.2) (19) -- -- -- (26) -- (48) --
Income tax provision.... 18,416 6.4 1,543 0.7 14,972 3.1 3,940 1.0 5,308 1.5
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Income (loss) from
continuing operations.. 29,619 10.2 6,629 2.8 21,362 4.5 (16,522) (4.1) 15,691 4.6
Income (loss) from
discontinued
operations............. 12,639 4.4 2,618 1.2 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)....... $ 42,258 14.6% $ 9,247 4.0% $ 22,808 4.8% $(26,747) (6.7)% $ 13,060 3.8%
======== ===== ======== ===== ======== ===== ======== ===== ======== =====
Pro forma net income
(loss)................. $ 42,258 14.6% $ 6,727 3.0% $ 20,022 4.2% $(30,067) (7.6)% $ 7,075 2.0%
======== ===== ======== ===== ======== ===== ======== ===== ======== =====
</TABLE>

Six Months Ended June 30, 1999, Compared to Six Months Ended June 30, 1998

Revenues. SNC's revenues increased $64.0 million, or 28.6%, to $287.4 million
in the first half of 1999 from $223.4 million in the first half of 1998. The
increase in revenues was due primarily to increased services to customers
within the Brann Worldwide and Bounty SCA Worldwide networks and to a lesser
extent, increased sales volumes within the Arnold Worldwide network. Revenues
of Brann Worldwide increased $31.1 million, or 24.3%, for the six months ended
June 30, 1999 as compared to the same period in 1998 due to increased levels of
service provided to both new and existing clients in the U.S. and the U.K. This
increase accounted for 48.6% of the total increase in revenues for the six
months ended June 30, 1999. Revenues of Bounty SCA increased $28.3 million, or
77.7%, for the six months ended June 30, 1999 as compared to the same period in
1998 as a result of increased sampling program activities and the purchase of
MSG in March 1999, which accounted for $15.6 million of the increase. Bounty
SCA's increase in revenues accounted for 44.2% of the total increase in
revenues for the six months ended June 30, 1999. Revenues of Arnold Worldwide
increased $4.6 million, or 7.8%, for the first half of 1999 as compared to the
same period in 1998 due to increase in creative and advertising services
provided to existing and new clients. This increase accounted for 7.2% of the
total increase in revenues for the six months ended June 30, 1999.

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<PAGE>

Cost of services. SNC's cost of services increased $45.8 million, or 31.3%,
to $192.2 million in the first half of 1999 from $146.4 million in the first
half of 1998. Cost of services as a percentage of revenues increased to 66.9%
for the six months ended June 30, 1999 from 65.5% for the same period in 1998.
The dollar fluctuation in cost of services at our various operating units
corresponds to the revenue changes discussed above. Cost of services within the
Brann Worldwide network increased $21.1 million, or 24.5%, in the first half of
1999 and accounted for 46.1% of the total increase in cost of services. As a
percentage of revenues, Brann Worldwide's cost of services remained constant
between the first half of 1999 and the same period in 1998 at 67.3% for both
periods. Brann Worldwide's cost of services as a percentage of revenue was
favorably impacted in 1999 by a fee of $3.8 million, net of related expenses
that was received for termination of certain services under an existing
contract. Cost of services within the Bounty SCA Worldwide network increased
$21.4 million, or 108.7%, for the six months ended June 30, 1999 due, in part,
to the purchase of MSG in March, 1999, which accounted for $11.6 million of the
increase. Bounty SCA's increase in cost of services accounted for 46.7% of the
total increase in cost of services. As a percentage of revenues, Bounty SCA's
cost of services for the six months ended June 30, 1999 increased to 63.5% from
54.0% for the corresponding period in 1998 due primarily to the higher cost of
services to revenues ratio generated by MSG's operations. Cost of services
within the Arnold Worldwide network increased $3.3 million, or 8.0%, for the
six months ended June 30, 1999 and accounted for 7.2% of the total increase in
cost of services. Arnold Worldwide's cost of services as a percentage of
revenues remained relatively constant between the first half of 1999 and the
same period in 1998 at 69.3% and 69.1%, respectively.

Selling, General and Administrative Expenses. SNC's selling, general and
administrative expenses decreased $0.5 million, or 1.1%, to $45.9 million in
the first half of 1999 from $46.4 million in the first half of 1998. Selling,
general and administrative expenses as a percentage of revenues decreased to
16.0% in the first half of 1999 from 20.8% in the first half of 1998 as a
result of the close monitoring and containment of these expenses.

Compensation to Stockholders. No compensation to stockholders was recorded in
the six months ended June 30, 1999. Compensation to stockholders was $0.4
million in the six months ended June 30, 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 $1.4 million in acquisition and
related costs during the six months ended June 30, 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 six months
ended June 30, 1998, and these costs were related to the consummation of
pooling of interests transactions during the six months ended June 30, 1998.
SNC completed three pooling of interests transactions valued at approximately
$206 million during the six months ended June 30, 1998.

Interest Expense. Interest expense decreased $0.3 million, or 30.0%, to
$0.7 million in the first half of 1999 from $1.0 million in the first half of
1998. The decline was attributable primarily to the repayment of debt of
companies that were acquired by us in 1998 through pooling-of-interests
combinations. If SNC increases its level of borrowings for acquisitions or
other purposes, interest expense will increase in future periods.

Investment Income. SNC recorded $1.2 million of investment income in the six
months ended June 30, 1999 and $1.6 million of investment income in the six
months ended June 30, 1998. Investment income varies based on the amount of
cash and cash equivalents available for investment during the periods.

Loss Related to Retained Interest in circle.com. SNC recorded a $0.5 million
loss related to its retained interest in circle.com for the six months ended
June 30, 1999 and a loss of $19,000 for the six months ended

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<PAGE>

June 30, 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 $18.4 million in the
six months ended June 30, 1999. SNC's effective tax rate on its recurring
operations is approximately 37.5% for the six months ended June 30, 1999. The
actual tax provision recorded differs from the effective rate partly due to the
nondeductibility of certain of the nonrecurring costs recorded during the
period.

The combined income tax provision of SNC and circle.com for the six months
ended June 30, 1999 and June 30, 1998 does not equal Snyder Communications'
income tax provision for the corresponding periods due to the tax effect of
SNC's 20% retained interest in circle.com as discussed above.

Income (Loss) from Continuing Operations. SNC's income from continuing
operations increased $23.0 million to income of $29.6 million in the first half
of 1999 from $6.6 million in the first half of 1998, due primarily to our
overall growth and the significant decrease in nonrecurring acquisition and
related costs, as well as the close monitoring and containment of overhead
costs.

The sum of income (loss) from continuing operations of SNC and circle.com for
the six months ended June 30, 1999 and June 30, 1998 does not equal the income
(loss) from continuing operations of Snyder Communications for the
corresponding periods due to SNC's 20% retained interest in circle.com as
discussed above.

In the second half of 1999, Snyder Communications expects to incur
approximately $7 million of expenses related to the recapitalization proposal
and approximately $16 million relating to the healthcare services spin-off.
These expenses consist primarily of financial advisory fees, legal, accounting,
SEC registration fees and printing fees. We expect that the estimated $7
million of expenses related to the recapitalization will have an impact on our
income from continuing operations for the year ending December 31, 1999. In
addition, Snyder Communications' intention to focus on internal growth for SNC,
circle.com and Ventiv as the primary means of growth is a shift from our past
acquisition growth pattern. To facilitate our growth, we intend to invest over
$20 million into our business in the next 12 to 18 months to promote our
brands, further enhance the skills of our employees, further our business
development efforts, and to make further investment in technology. We expect
that this additional investment to expand our business will cause an increase
in SNC's expenses over that period.

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 Ventiv have been classified as
discontinued operations. Ventiv reported net income of $12.6 million and $2.6
million in the first half of 1999 and 1998, respectively. Net income from the
discontinued healthcare operations increased due to the overall growth within
Ventiv, a one-time $2 million reduction in the estimated amount of employee-
related social charges to be paid as a result of the integration of our French
sales force and the decrease in nonrecurring acquisition and related costs. We
expect to reflect the estimated $16 million of costs related to the healthcare
services spin-off in the results from discontinued operations when the spin-off
occurs.

Net Income (Loss). SNC's net income increased $33.1 million to $42.3 million
in the first half of 1999 from $9.2 million in the first half of 1998 due
primarily to SNC's overall growth and the decrease in nonrecurring acquisition
and related costs.

We have agreed to provide incremental consideration for the acquisition of
MSG based on the average trading price of SNC stock, circle.com stock, and
Ventiv stock for the twenty trading days ending on October 15, 1999 (or a such
lesser number of days that a public market exists for the securities up to
October 15, 1999). Based on the closing price of the Snyder Communications
stock on August 28, 1999, the amount of such payment would result in non-cash
expense of approximately $10 million, payable in SNC stock.

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<PAGE>

The sum of net income (loss) of SNC and circle.com for the six months ended
June 30, 1999 and June 30, 1998 does not equal the net income (loss) of Snyder
Communications for the corresponding periods due to SNC's 20% retained interest
in circle.com as discussed above.

Pro Forma Net Income (Loss). Pro forma net income (loss) shows the effect on
net income (loss) assuming all of SNC's operations were taxed as C corporations
for the six months ended June 30, 1999 and 1998, respectively. Pro forma net
income (loss) is worse than net income (loss) in the first half of 1998. In the
first half of 1999, all of SNC's 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 half of 1998 includes benefits from the S corporation status of
certain entities prior to our acquisition of them. Pro forma net income (loss)
increased $35.6 million, to income of $42.3 million in the first half of 1999
from $6.7 million in the first half of 1998, due primarily to SNC's overall
growth and the decrease in nonrecurring acquisition and related costs.

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. The increase in revenues was primarily
attributable to increased services to new and existing customers within the
Brann Worldwide, Arnold Worldwide and Bounty SCA Worldwide networks. Revenues
of Brann Worldwide increased $49.8 million, or 21.4%, for the year 1998 as
compared to 1997 as a result of increased marketing services provided to new
and existing clients in the U.S. and the U.K. offset by a $14.5 million decline
in revenues from the sale of long distance service in the U.S. This change
resulted from the start up of a new contract for similar services provided to a
previous customer in 1997. Brann Worldwide's increase in revenues accounted for
60.1% of the 1998 total increase in revenues. Revenues of Arnold Worldwide
increased $24.5 million, or 25.9%, for the year 1998 as compared to 1997 due to
increase in creative and advertising services to existing and new clients. This
increase accounted for 29.6% of the total increase in revenues during 1998.
Revenues of Bounty SCA increased $8.5 million, or 12.2%, for the year 1998 as
compared to 1997 as a result of increased Wallboard(R) locations and sampling
program activities. Bounty SCA's increase in revenues accounted for 10.3% of
the 1998 total increase in revenues.

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. Cost of
services within the Bounty SCA Worldwide network increased $8.0 million, or
22.6%, in 1998 and accounted for 18.2% of the total increase in cost of
services. The increase in cost of services is consistent with the revenue
change discussed above. Bounty SCA's cost of services as a percentage of
revenues for the year 1998 increased to 55.2% from 50.5% for the year 1997 as a
result of higher costs in Bounty SCA's U.S. operations. Cost of services within
the Brann Worldwide network increased $26.9 million, or 16.8%, in 1998 and
accounted for 61.0% of the total increase in cost of services. As a percentage
of revenues, Brann Worldwide's cost of services for the year 1998 decreased to
65.9% from 68.5% for the year 1997 due to the ability of existing client
support personnel within the network to handle its growth. Cost of services
within the Arnold Worldwide network increased $9.1 million, or 12.1%, in 1998
and accounted for 20.8% of the total increase in cost of services. Arnold
Worldwide's cost of services as a percentage of revenues for the year 1998
decreased to 71.1% from 79.8% for the year 1997 due to a change in the overall
mix of services provided within the Arnold Worldwide 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 as a result of the growth in revenues discussed above.
Selling, general and administrative expenses as a percentage of revenues
decreased to 19.2% in 1998 from 22.8% in 1997 due primarily to the lower
proportional increase in selling, general and administrative expenses necessary
to support the growth in revenues. In addition, SNC has 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

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<PAGE>

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 Expense. 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.

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.

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 $26,000 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."

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<PAGE>

The combined income tax provision of SNC and circle.com for the year 1997
does not equal Snyder Communications' 1997 income tax provision due to the tax
effect of SNC's 20% retained interest in circle.com as discussed above.

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.

The sum of income (loss) from continuing operations of SNC and circle.com for
the year 1998 and 1997 does not equal the income (loss) from continuing
operations of Snyder Communications for the corresponding periods due to SNC's
20% retained interest in circle.com.

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, 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.

The sum of net income (loss) of SNC and circle.com for the year 1998 and 1997
does not equal the net income (loss) of Snyder Communications for the
corresponding periods due to SNC's 20% retained interest in circle.com.

Pro Forma Net Income (Loss). Pro forma net income (loss) shows the effect on
net income (loss) assuming all of SNC's operations were taxed as C corporations
for all of 1998 and 1997. Pro forma net income (loss) is worse than net income
(loss) in 1998 and 1997. SNC's 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.

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. Revenues of Bounty SCA Worldwide increased $21.4 million, or
44.0%, for the year 1997 as compared to 1996 as a result of increased
distribution of product samples and other advertising materials for clients in
the U.S. This increase in revenues accounted for 41.5% of the 1997 total
increase in revenues. Revenues of Brann Worldwide increased $13.6 million, or
6.2%, for the year 1997 as compared to 1996 due primarily to increased levels
of service provided to both new and existing clients in the U.S. and the U.K.
Brann Worldwide's increase in revenues accounted for 26.3% of the total
increase in revenues during 1997. Revenues of Arnold Worldwide increased
$16.6 million, or 21.3%, for the year 1997 as compared to 1996 as a result of
increased creative and advertising services provided to clients. This increase
accounted for 32.2% of the 1997 total increase in revenues.

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 as a result of the
increased revenues discussed above. Overall cost of services as a

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<PAGE>

percentage of revenues remained consistent at 68.0% in 1997 and 67.8% in 1996.
Cost of services within the Bounty SCA Worldwide network increased $8.3
million, or 30.5%, in 1997 and accounted for 23.1% of the total increase in
cost of services. Bounty SCA's cost of services as a percentage of revenues for
the year 1997 decreased to 50.5% from 55.7% for the year 1996 due to the
overall growth within the network and the ability of the client support
personnel to handle increased client services. Cost of services within the
Arnold Worldwide network increased $14.7 million, or 24.3%, in 1997 and
accounted for 41.2% of the total increase in cost of services. This increase in
cost of services corresponds to the revenue change discussed above. As a
percentage of revenues, Arnold Worldwide's cost of services for the year 1997
increased to 79.8% from 77.9% for the year 1996. Cost of services within the
Brann Worldwide network increased $12.8 million, or 8.7%, in 1997 and accounted
for 35.7% of the total increase in cost of services. The increase in cost of
services is consistent with the increase in services provided. Brann
Worldwide's cost of services as a percentage of revenues for the year 1997
increased to 68.5% from 66.9% for the year 1996.

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 as a result of the increased revenues discussed
above. 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 Expense. 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.

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<PAGE>

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.

The sum of income (loss) from continuing operations of SNC and circle.com for
the year 1997 and 1996 does not equal the income (loss) from continuing
operations of Snyder Communications for the corresponding periods due to SNC's
20% retained interest in circle.com.

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.

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.

The combined income tax provision of SNC and circle.com for the year 1997 and
1996 does not equal Snyder Communication's income tax provision for the
corresponding periods due to the tax effect of SNC's 20% retained interest in
circle.com.

Discontinued Operations. The loss from discontinued operations in 1997
consisted of a loss of $8.7 million from Ventiv and a loss of $1.5 million from
BWA. The loss from discontinued operations in 1996 consisted of $0.1 million in
income from Ventiv offset by a $1.5 million loss from BWA. The 1997 loss from
Ventiv 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.

The sum of net income (loss) of SNC and circle.com for the year 1997 and 1996
does not equal the net income (loss) of Snyder Communications for the
corresponding periods due to SNC's 20% retained interest in circle.com.

Pro Forma Income (Loss). Pro forma net income (loss) shows the effect on net
income (loss) assuming all of SNC's operations were taxed as C corporations for
all of 1997 and 1996. Pro forma net income (loss) is worse than net income
(loss) in 1997 and 1996. Pro forma income (loss) decreased $37.2 million to a
net loss of $30.1 million in 1997 from net income of $7.1 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).

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<PAGE>

Liquidity and Capital Resources

At June 30, 1999, SNC had $46.4 million in cash and equivalents. Cash and
equivalents decreased $1.5 million during the six months ended June 30, 1999,
due to the $27.0 million provided by operating activities from continuing
operations, the $21.8 million provided by financing activities from continuing
operations and the $1.0 million effect of changes in the exchange rate, offset
by the $40.0 million used in investing activities for continuing operations and
$11.2 million used by discontinued operations. The $21.8 million in cash
provided by financing activities consists primarily of additional borrowings
for acquisitions as well as investments and advances from Snyder
Communications. The $40.0 million in cash used in investing activities consists
primarily of cash used for business acquisitions, capital expenditures, as well
as an additional investment in circle.com. Other than the $12.3 million of debt
attributed to circle.com at June 30, 1999, all cash advances and businesses
attributed to circle.com have been considered a capital contribution to
circle.com. After the recapitalization, Snyder Communications will attribute
each future incurrence or issuance of external debt and the proceeds of that
incurrence or issuance to SNC, to the extent the proceeds are used for the
benefit of SNC, and to circle.com, to the extent the proceeds are used for the
benefit of circle.com by SNC. As a result, with respect to the allocation of
interest and debt, the historical financial statements will not be comparable
to future periods. Cash and cash equivalents decreased $23.9 million for the
year ended December 31, 1998, due to $49.8 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, $40.8 million provided by financing activities from continuing
operations and $0.7 million effect of exchange rates changes. The $49.8 million
used in investing activities for continuing operations consists primarily of
cash used for capital expenditures and the purchase of subsidiaries. The $40.8
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 of its existing
business over the next 12 months and beyond. If SNC acquires additional
businesses in transactions that include cash payments as part of the purchase
price, both in the short-term and the long-term, we will first use excess cash
available from operations and then pursue additional debt or equity financing
as sources of cash necessary to complete the acquisitions. In August 1999,
Snyder Communications entered into on a $195 million unsecured revolving credit
facility with a term of four years, which we will use for acquisitions and
general corporate purposes, as well as the repurchase of up to $200 million of
Snyder Communications' common stock that the board of directors has previously
approved. Interest on amounts borrowed under the credit facility is based on
the London Interbank Offered Rate, the lending bank's base rate of interest or
the federal funds rate. Availability under the credit facility is subject to
our compliance with various financial ratios, operating covenants and other
customary conditions. On August 28, 1999, there was $90 million in outstanding
borrowings under the credit facility.

Of the $200 million approved stock buy-back, $100 million is authorized only
for the repurchase of shares to be reissued in specifically identified purchase
business combinations. In July and August of 1999, through August 26, 1999,
Snyder Communications repurchased 3,915,300 shares of its existing common stock
for a total of $72.1 million and returned those shares to its corporate
portfolio. In addition to borrowing under the line of credit, Snyder
Communications could pursue other debt or equity transactions to finance our
acquisitions, depending on market conditions. We cannot assure you that we will
be successful in raising the cash required to complete all acquisition
opportunities which SNC may seek in the future.

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 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.

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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

Long-Term Debt Exposure

<TABLE>
<CAPTION>
Fair Value Fair Value
Carrying with 150 with 150
Amount Basis Basis
December Fair Point Point
31, 1998 Value(1) Increase(2) Decrease(2)
-------- -------- ----------- -----------
<S> <C> <C> <C> <C>
Long-term debt (fixed rate)........... $12,283 $12,488 $11,833 $13,187
</TABLE>
- --------

(1) Fair value is calculated using the discounted cash flows method.

(2) Basis point change is assumed on all interest rates of outstanding debt.

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Foreign Currency Exchange Rate Exposure

Fluctuations in foreign currency exchange rates affect the reported amounts
of our assets, liabilities and operations. For purposes of quantifying the risk
associated with fluctuations in the foreign exchange rate, we used a
sensitivity analysis model. We assumed a hypothetical detrimental change of 10%
in the exchange rates on our assets, liabilities and revenues denominated in a
foreign currency. A 10% fluctuation was assumed for all exchange rates at
December 31, 1998. However, our material exposure to foreign exchange rate
fluctuations on continuing operations is the British pound. Approximately 95%
of the Company's 1998 continuing revenues from international operations were
conducted in the United Kingdom. The amounts below represent the impact of all
exchange rates on our total assets, liabilities and revenues.

<TABLE>
<CAPTION>
10% Decrease in value
of Local Currencies
Balance at to
December 31, 1998 U.S. Dollar
----------------- ---------------------
<S> <C> <C>
Assets.................................. $601,416 $585,131
Liabilities............................. 251,323 238,992
Revenue................................. 480,289 465,243
</TABLE>

The following illustrates the impact on the fair value of all of our long-
term fixed rate debt assuming 10% fluctuations in all of our foreign exchange
rates (in thousands):

<TABLE>
<CAPTION>
Fair Value Fair Value with 10% Fair Value with 10%
December increase in strength of decrease in strength of
31, 1998 U.S. dollar to foreign U.S. dollar to foreign
---------- ----------------------- -----------------------
<S> <C> <C> <C>
Long-term debt (fixed
rate).................. $12,488 $11,636 $13,530
</TABLE>

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SNC--BUSINESS

General

SNC is a leading international full-service direct marketing, advertising and
communications agency, with operations throughout the United States and the
United Kingdom and in continental Europe. We provide direct marketing services
to clients through Brann Worldwide and Bounty SCA Worldwide and advertising
services through Arnold Worldwide. 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. For the year ended December 31, 1998, no single client accounted for
10% or more of SNC's revenues, except GTE Communications Corporation, which
accounted for 10.4% of SNC's revenues for that period. For the six months ended
June 30, 1999, no one client accounted for more than 9% of SNC's revenues.

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.

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.

According to the December 1998 report by Interpublic Group of Companies'
McCann-Erickson World Group, worldwide advertising expenditures were
approximately $415 billion in 1998, representing an increase of approximately
4.9% in 1998 and a five-year compound annual growth rate of approximately 6.6%
since 1993. Advertising expenditures in the United States were approximately
$200 billion in 1998, representing an increase of approximately 7.1% in 1998
and a five-year compound annual growth rate of approximately 7.6% since 1993.
United States advertising expenditures are expected to grow approximately 5.5%
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 direct marketing
methods which utilize demographic information, information supplied by
consumers through surveys, product sampling programs and face-to-face
contact. This enables them to customize their marketing message for
discrete target markets. 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. Approximately 80% of our business operations are focused on
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. In 1998, Brann Worldwide was ranked as
the largest direct marketing agency in the world by the Direct Marketing
Association. In addition, Bounty SCA Worldwide provides sales promotion
and specialty direct marketing services. For more than 25 years, Arnold
Worldwide 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.

. Increase Penetration of Significant Clients. We have built long-standing
relationships with many clients, including, listed alphabetically, Bank
of America, Barclays, IBM, McDonald's, Procter & Gamble and Volkswagen
of America. This list is representative of our clients, in terms of
their size, the range of industries in which they operate and the amount
and type of services we provide to them.

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We believe that there are significant opportunities to increase our
share of companies' direct marketing, advertising and communications
expenditures by using our global network to provide a comprehensive
package of 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 take
advantage of 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. To date, we
have successfully used our comprehensive and global approach as an
effective tool in winning new business.

. 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, Brann
Worldwide 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 Worldwide was awarded Advertising Age's prestigious Best for 1997
award for excellence in advertising. The winning spot was Arnold
Worldwide's "Sunday afternoon" commercial for Volkswagen's Golf, with
the now famous "Da, da, da" background lyrics. Arnold Worldwide 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.

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 Brann Worldwide
and Bounty SCA Worldwide. Our advertising services are provided through Arnold
Worldwide.

We have provided a description of the services that Brann Worldwide, Bounty
SCA and Arnold Worldwide provide to their clients, along with several case
studies. The clients and the services described in

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each of these case studies are intended to be representative of the size of our
clients, the industries in which they operate and the services that we render
to them. The case studies are not intended to imply that the clients mentioned
are those from which we derive most of our revenues.

Brann Worldwide

We provide full scale direct marketing and sales solutions through the Brann
Worldwide network. Brann Worldwide 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, Brann Worldwide 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 Brann Worldwide to predict
the results of a direct marketing program and enables clients to quantify and
measure the return on their marketing investment. Brann Worldwide uses a
combination of proprietary statistical models to predict consumer response and
marketing program profitability. One of these types of models is Brann
Worldwide'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. Brann Worldwide uses
this modeling process to craft client marketing programs to maximize
profitability.

Database Management. Brann Worldwide 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.

Direct Mail. Brann Worldwide 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. Brann Worldwide'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

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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. Brann Worldwide 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, Brann Worldwide also analyzes the
results of marketing programs. This allows Brann Worldwide to provide an
evaluation of the performance of its clients' marketing campaigns. Brann
Worldwide's clients' marketing needs are constantly changing, and through the
analysis of the effectiveness of a particular marketing plan, Brann Worldwide
provides its clients with a real-time evaluation of the clients' return-on-
investment in Brann Worldwide'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 distinguish their offer from
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.
Brann Worldwide was chosen to help the Associates accomplish this task.

Through its research and knowledge of the college market, Brann Worldwide
determined that college students are wary of advertising messages from large
companies. With that in mind, Brann Worldwide developed a 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 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. The program Brann Worldwide developed for
the Associates is typical of the direct marketing services that Brann Worldwide
currently provides to other clients.

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.

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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. These companies are representative of the size and industries
of the clients that typically participate in our targeted product sampling
programs. Bounty SCA has established relationships with leading associations,
such as the American Diabetes Association and the Arthritis Foundation, which
permit Bounty SCA to use the logos of these associations on Bounty SCA's sample
packs. Bounty SCA is required to obtain the approval of an association before
using its logo on any particular type of sample pack.

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. 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.

Each of the WallBoard(R) sponsors has "category exclusivity" for their
product in their program. Examples that are representative of the size and
industries 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 programs, Bounty SCA
has established relationships with associations

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that specialize in the particular targeted area, such as the American Heart
Association and the National Child Care Association. These associations permit
us to use their logos on our Wallboard(R) information displays.

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
assisting the unit in accomplishing these goals.

Bounty SCA Worldwide determined to develop a comprehensive plan to engage the
consumer and provide a memorable experience intended to create a high value,
quality impression on 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;

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. in-school events that focus on teen leadership; and

. school book covers and locker posters advertising the brand's products.

The program Bounty SCA Worldwide developed for Procter & Gamble is typical of
the marketing services that Bounty SCA currently provides to other clients.

Arnold Worldwide

Our advertising and public relations business is operated through our Arnold
Worldwide network. Arnold Worldwide provides a broad range of services to plan
and create advertising designed to build brand appeal, using a variety of
mediums such as television, radio, print and sales promotion. Some of Arnold
Worldwide's major clients include, alphabetically, Bell Atlantic, Bose, Fleet,
McDonald's, Mobil, Ocean Spray, SAP, Titleist and Volkswagen.

Arnold Worldwide consists of various divisions, including:

. 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 Worldwide relies
upon its Brand Essence philosophy. The Brand Essence approach begins by
studying existing data on a particular clients' brand. Arnold Worldwide 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. Two representative
examples of our Brand Essence approach are described below.

Case Study--Creating a New Brand Image for SAP

Based on 1997 actual revenues and 1998 estimated revenues, SAP is the world's
largest enterprise software company. R/3 is SAP's principal enterprise resource
planning software product. SAP believed that customer perceptions regarding the
cost and complexity of R/3, its low awareness outside the category, negative
publicity and competitive attacks had weakened the brand, tarnished its image
and caused its market share to decrease. 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 Worldwide
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 influenced by the negative publicity
surrounding SAP. This negative publicity was damaging the appeal of the brand.
The key to changing consumers' perceptions was to create a new brand image that
would highlight the positive benefits of increased knowledge and improved
efficiency while turning the negative perceptions regarding cost and complexity
into positives.

Arnold Worldwide developed a brand image that focuses on the benefits 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 from the software will greatly
outweigh any short-term difficulties. The advertising that was developed
featured friendly people and focused on the benefits

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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 an extensive advertising schedule in various media,
including business and trade publications, direct marketing, Internet
advertising and sales materials. This brand positioning campaign was used on
four continents. Based on our effectiveness in these international markets,
Arnold Worldwide was also chosen as the agency of record for SAP Canada.

Since 1997, SAP's sales and revenues have grown significantly. We believe
that the success of this advertising campaign was one of the many factors
contributing to this growth.

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. 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 Worldwide analyzed the business and together with Fleet, determined
the best target for the product. Arnold Worldwide 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.

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.

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 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.

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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.

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............... 37 President and Chief Operating Officer
A. Clayton Perfall.............. 40 Chief Financial Officer

See "Management" for information with respect to Mr. Snyder, Ms. Snyder and
Mr. Perfall.

The senior managers of Brann Worldwide, Bounty SCA Worldwide and Arnold
Worldwide consist of the following individuals:

<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Christopher Gater............... 48 Group President--Brann Worldwide
Steven M. Kaplan................ 39 Group President--Bounty SCA Worldwide
Edward Eskandarian.............. 62 Group President--Arnold Worldwide
</TABLE>

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<PAGE>

Christopher Gater serves as Group President of Brann Worldwide. Mr. Gater
began his career at Brann Worldwide'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 Brann Worldwide'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 Worldwide Prior to
Snyder Communications' acquisition of Arnold Worldwide in 1998, Mr. Eskandarian
was President of Arnold Worldwide 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 Worldwide, 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 June 30, 1999, SNC employed approximately 7,000 persons worldwide. We
believe that our relations with our employees are satisfactory. None of our
employees are represented by a labor union, nor have we ever experienced a work
stoppage.

Properties

Our corporate headquarters are located in Bethesda, Maryland in leased
facilities. We also lease facilities in:

<TABLE>
<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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<PAGE>

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 consulting regarding its clients' e-commerce
strategies and related business process, consumer research, online media
planning and creative design, which it refers to as "front-end services," as
well as architecture design, systems integration, implementation and ongoing
performance analysis, which it refers to as "back-end services." Until May
1999, the operations of circle.com were contained within the Brann Worldwide
and Arnold Worldwide 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. We plan to focus on internal growth
for the foreseeable future as the primary means of expanding circle.com,
although we will consider attractive acquisition opportunities as they arise.

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.

<TABLE>
<CAPTION>
For the Six Months Ended For the Years Ended
June 30, December 31,
------------------------------ ---------------------------------------------
1999 1998 1998 1997 1996
-------------- ------------- -------------- ------------- -------------
(unaudited) (dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenues............ $12,347 100.0% $4,830 100.0% $13,514 100.0% $5,567 100.0% $3,308 100.0%
Operating expenses:
Professional services... 7,128 57.7% 2,420 50.1% 7,114 52.6% 3,044 54.7% 1,960 59.3%
Office and general...... 7,017 56.8% 2,291 47.4% 5,902 43.7% 3,621 65.0% 2,176 65.8%
------- ----- ------ ----- ------- ----- ------ ----- ------ -----
Income (loss) before
income taxes........... (1,798) (14.5)% 119 2.5% 498 3.7% (1,098) (19.7)% (828) (25.1)%
------- ----- ------ ----- ------- ----- ------ ----- ------ -----
Income tax provision
(benefit).............. 593 4.8% 212 4.4% 500 3.7% (968) (17.4)% (588) (17.8)%
------- ----- ------ ----- ------- ----- ------ ----- ------ -----
Net loss................ $(2,391) (19.3)% $ (93) (1.9)% $ (2) -- % $ (130) (2.3)% $ (240) (7.3)%
======= ===== ====== ===== ======= ===== ====== ===== ====== =====
Pro Forma net income
(loss)................. $(2,391) (19.3)% $29 0.6% $123 0.9% $ (741) (13.3)% $ (545) (16.5)%
======= ===== ====== ===== ======= ===== ====== ===== ====== =====
</TABLE>

Six Months Ended June 30, 1999, Compared to Six Months Ended June 30, 1998

Net Revenues. Circle.com's net revenues increased $7.5 million, or 156%, to
$12.3 million in the first half of 1999 from $4.8 million in the first half of
1998. This includes approximately $2.2 million of revenue growth from purchase
transactions completed during 1998. The remaining increase in revenue is the
result of increases in service provided to both new and existing clients of
$4.1 million and $1.2 million, respectively, consisting of multiple projects.
Circle.com experienced growth in its client base in both the U.S. and the U.K.
from the first half of 1998 to the first half of 1999, as more companies
recognize that the Internet is an increasingly important marketing tool and an
effective way to reach customers. Excluding the growth in revenues from
purchase transactions, revenues from services provided in the U.S. grew by
approximately $4.3 million and revenues from services in the U.K. grew by
approximately $1.0 million.

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<PAGE>

Professional Service Expenses. Circle.com's professional service expenses
increased $4.7 million, or 196%, to $7.1 million in the first half of 1999 from
$2.4 million in the first half of 1998. Professional service expenses as a
percentage of net revenues increased to 57.7% in the first half of 1999 from
50.1% in the first half of 1998. The increase in professional service expenses
is consistent with the purchase transactions and increase in personnel at
circle.com necessary to support the increased level of business in 1999. We
have grown our infrastructure and personnel level at a faster rate than our
revenue level has increased in order to accommodate our growth. We believe that
our existing infrastructure can absorb additional business without added cost.
However, if we continue to pursue an aggressive growth strategy our costs could
continue to grow at a faster rate than our revenues as we pursue this strategy.

Office and General Expenses. Office and general expenses increased $4.7
million, or 204%, to $7.0 million in the first half of 1999 from $2.3 million
in the first half of 1998. Office and general expenses as a percentage of net
revenues increased to 56.8% in the first half of 1999 from 47.4% in the first
half of 1998. The increase in office and general expenses both as a percentage
of revenues and in absolute dollars is directly related to the expansion of our
infrastructure to support increased revenue and from $0.8 million of goodwill
amortization which results from the purchase transactions which were completed
during 1998. We believe the expanded infrastructure can absorb additional
business without added cost. We expect that office and general expense will
increase as a percentage of revenues in the second half of 1999 due to $1.9
million of goodwill amortization from the purchases of Tsunami Consulting
Group, Inc. and Natural Intelligence, Inc. in late June 1999 and increased
costs of having a publicly traded security. The office and general expenses
reported through the first half 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 provision of $0.6 million in
the six months ended June 30, 1999. The effective rate differs from the
statutory rate due primarily to nondeductible differences resulting from
goodwill amortization.

Net Income (Loss). Net loss increased to $2.4 million in the first half of
1999 from $0.1 million in the first half of 1998 due to the decreased operating
margin in 1999 which results from higher levels of personnel necessary to
accommodate growth of the business and due to increased goodwill amortization.
Pro forma net income (loss) decreased to a $2.4 million loss in the first half
of 1999 from $0.03 million income in the first half 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. To facilitate growth, we
intend to make investments in circle.com over the next 12 to 18 months to
promote the business and its name, to further enhance the skills of our
employees, to further business development efforts and to make further
investment in technology. We expect that this additional investment in
circle.com will cause an increase in our expenses over this period.

We expect to incur approximately $7 million of costs related to the
recapitalization. These costs, which will be reflected as expense equally on
SNC's and circle.com's income statements, will consist primarily of financial
advisory fees, legal, accounting, SEC registration fees and printing fees.

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. The remainder of the increase in revenues is the result of an increase in
services provided to both new and existing clients of $3.3 million and $2.2
million, respectively, consisting of multiple projects. Circle.com experienced
growth in its client base in both the U.S. and the U.K. Revenues from services
provided in the U.S. grew by approximately $4.8 million and revenues from
services in the U.K. grew by approximately $0.7 million, excluding purchase
transactions.. We believe that more companies recognize the Internet as an
increasingly important marketing tool and an effective way to reach customers.

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

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<PAGE>

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.

Net 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 $0.7 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. The increase in revenues is the
result of an increase in services provided to both new and existing clients of
$1.2 million and $1.1 million, respectively. Circle.com experienced growth of
approximately $1.8 million in the U.S. and approximately $0.5 million in the
U.K. as companies began to recognize the Internet as an increasingly important
marketing tool.

Professional Service Expenses. Circle.com's professional service expenses
increased $1.0 million, or 50%, to $3.0 million in 1997 from $2.0 million in
1996. The increase in expense was a result of additional staff required to
perform the increased level of work in 1997. 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 as a
result of the increased infrastructure required to support the 69.7% revenue
growth. Office and general expenses as a percentage of net revenues remained
fairly consistent at 65.0% in 1997 and 65.8% in 1996.

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 40.0%, to $0.7 million
in 1997 from $0.5 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

Circle.com has incurred cumulative losses of $2.8 million from its inception
through June 30, 1999. For the six months ended June 30, 1999, circle.com
recorded a net loss of $2.4 million. Circle.com has relied on investments from
SNC in order to build its business, acquire Internet services companies, and to
fund its operating and net losses.

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<PAGE>

SNC has invested $42.4 million in circle.com cumulatively through June 30,
1999, with $32.9 million of that investment having been made during the six
months ended June 30, 1999. Of the $32.9 million investment from SNC received
during the six months ended June 30, 1999, $25.1 million represents Snyder
Communications common stock issued for acquisitions contributed to circle.com,
$5.0 million was used in operating activities, and $1.8 million was used for
the purchase of computers and office equipment, offset by $1.2 million of cash
acquired from purchase transactions. In addition, Snyder Communications
incurred $12.3 million in debt on behalf of circle.com which was related to the
acquisitions of Tsunami and Natural Intelligence. Until May 1999, the
operations of circle.com were contained within the Brann Worldwide and Arnold
Worldwide networks, and the operations which became circle.com did not have
separately identified cash. As of June 30, 1999, circle.com had $2.2 million of
cash.

We believe that cash on hand as of June 30, 1999 will not be sufficient to
fund the operations of circle.com through the end of 1999. We currently expect
that circle.com will require additional cash to fund its growth and operating
losses over the next year and beyond. Accordingly, circle.com will need to
obtain additional funding from SNC, borrow money from a third party, or Snyder
Communications may need to issue more shares of circle.com stock. If Snyder
Communications issues additional shares of circle.com stock in order to fund
circle.com's operating losses, the result could be a dilution of the interests
of existing circle.com stockholders and SNC's retained interest. Circle.com
does not have any borrowing arrangement in place with a third party and,
therefore, relies on Snyder Communications as its source of cash. Other than
the $12.3 million of debt allocated to circle.com at June 30, 1999, the funding
provided to circle.com by Snyder Communications prior to the issuance of the
circle.com stock will be considered an investment in circle.com by Snyder
Communications. Following the issuance of the circle.com stock, further cash
provided to circle.com by Snyder Communications will be considered an interest-
bearing loan from SNC, a capital contribution resulting in an adjustment in
SNC's retained interest in circle.com or an allocation of Snyder
Communications' debt and interest expense to circle.com if Snyder
Communications must borrow the cash in order to fund circle.com. In August
1999, Snyder Communications closed on a $195 million unsecured revolving credit
facility with a term of four years, which will be used for acquisitions and
general corporate purposes, as well as the repurchase of up to $200 million of
Snyder Communications' common stock that the board of directors has previously
approved. Interest on amounts borrowed under the $195 million credit facility
is based on the London Interbank Offered Rate, the lending bank's base rate of
interest or the federal funds rate. Availability under this credit facility is
subject to Snyder Communications' compliance with various financial ratios,
operating covenants and other customary conditions. On August 28, 1999, there
was $90 million in outstanding borrowings under the credit facility. As a
result with respect to interest and debt allocation to circle.com, the
historical financial statements will not be comparable to future periods. We
anticipate that Snyder Communications will be in a position to fund the needs
of circle.com in the future and we will monitor and evaluate market conditions
to assess the possibility of other sources of debt or equity financing as the
need arises. However, there can be no assurance that circle.com will be able to
obtain third party debt or equity financing, or that Snyder Communications will
continue to be in a position to provide additional funding to circle.com in the
longer-term.

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 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.

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<PAGE>

Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from changes in foreign currency exchange
rates. We are subject to foreign currency exchange rate risk related to our
international operations. We do not currently engage in hedging or other market
risk management tools. Circle.com has no long-term debt outstanding at December
31, 1998.

Foreign Currency Exchange Rate Exposures

Fluctuations in foreign currency exchange rates affect the reported amounts
of our assets, liabilities and operations. For purposes of quantifying the risk
associated with fluctuations in the foreign exchange rate, we used a
sensitivity analysis model. We assumed a hypothetical detrimental change of 10%
in the exchange rates on our assets, liabilities and revenues denominated in a
foreign currency. A 10% fluctuation was assumed for all exchange rates at
December 31, 1998. Our material exposures to foreign exchange rate fluctuations
on continuing operations are the British pound, 100% of our foreign operations
are located in the United Kingdom. The amounts below represent the impact of
all exchange rates on the Company's total assets, liabilities and revenues.

<TABLE>
<CAPTION>
10% Decrease in value
Balance at of Local Currencies
December 31, 1998 to U.S. Dollar
----------------- ---------------------
<S> <C> <C>
Assets.................................. $13,697 $13,608
Liabilities............................. $ 4,591 $ 4,412
Revenues................................ $13,514 $13,288
</TABLE>

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CIRCLE.COM--BUSINESS

General

Circle.com is an 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 consulting regarding
our clients' e-commerce strategies and related business processes, consumer
research, online media planning and creative design, which we refer to as
"front-end services," as well as architecture, design, systems integration,
implementation and ongoing performance analysis, 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, this 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
simple web design has evolved into a more comprehensive 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 that it enables companies 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. As a result,
each customer experiences his or her own individualized web site, customized
based on many factors, including the particular customer's previous purchases,
demographic information and prior usage of the web site. 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.

To meet the rapidly growing demand for Internet professional services, a
number of traditional service providers, such as management consultants,
systems integrators and marketing and advertising firms, have created groups
within their organizations that focus on the Internet needs of their clients.
However, these firms often lack the full suite of both front-end and back-end
services necessary to provide a comprehensive solution

98
<PAGE>

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 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 a
client's 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 its resources to coordinate simultaneous efforts by its
various areas of expertise, including a full range of Internet-related services
such as consulting, design, development, promotion and direct marketing. These
areas of expertise are what circle.com calls its "Centers of Excellence." This
approach ensures that the appropriate resources are focused on the individual
project requirements, providing the responsiveness necessary for its clients 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. This promotes long-term client relationships that
evolve as the client's Internet-based business strategy evolves. Among the
comprehensive 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.

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<PAGE>

. 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 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 of these 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.

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. 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 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 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 Internet-related
disciplines, and our comprehensive 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. Our
relationship with Snyder Communications enables us to 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. The clients and the services described in each of these case studies
are intended to be representative of the size of our clients, the industries in
which they operate and the services that we render to them. The case studies
are not intended to imply that the clients mentioned are those from which we
derive most of our revenues.

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

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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.

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.

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. 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 Web site -- 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
Internet.

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 and bill viewing
and allows the customer to order services from Bell Atlantic directly over the
Internet. 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.

United Parcel Service -- The Document Exchange --
http://www.exchange.ups.com

We recently worked with UPS to develop UPS's new electronic, Internet-based
courier service called 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.

UPS's goal was to build new in-depth customer relationships on a global basis
and to market its new service to the ultimate end users, as opposed to shipping
managers. We identified the opportunity to use the Internet as the main sales
channel for UPS's Document Exchange. 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."

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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 a
comprehensive marketing plan that included both Internet-based and offline
marketing tactics.

As a result, UPS has gained an increased 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 individualized web site content
in real time 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 its
existing communications and transaction capabilities by using 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 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
address specific customer needs;

. 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.

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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). 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.

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. Enterprise
architectures address an entire portfolio of applications and technologies
across an enterprise, while system architectures focus on a specific
application or system. 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 client's 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 web site, the focus is no
longer on the delivery of a certain page, but 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(TM) enables our clients to:

. build their knowledge of the end-user's interests;

. enhance what the consumer 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, Java,
a cross platform development environment, and a database independent
design.

. Maintainability--We impose strict standards for developing computer code
to insure the DME(TM) is more adaptable in the face of changing
requirements.

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. Configurablity--The DME(TM) 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(TM) to be easily scaled by adding additional data servers,
object servers, and application servers.

We believe the DME(TM) 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 June 30, 1999, we employed approximately 283 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.

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Competition

Our business incorporates the successful integration of strategic consulting,
creative design and systems engineering skills to utilize 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 that
one of our significant competitive strengths is our ability to offer a
structured approach to designing a fully comprehensive Internet-based plan.

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, 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 and legislation is pending at both the federal and state level
that would, if enacted, regulate various aspects of the Internet.

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In 1998, the Digital Millenium Copyright Act was enacted which limits
liability of Internet service providers for content posted by users, prohibits
circumvention of copyright management systems, and clarifies certain copyright
matters covering the digital performance right in sound recordings. Also
enacted in 1998, the Internet Tax Freedom Act provides for a three year
moratorium on state and local taxes on Internet access fees and multiple or
discriminatory state and local taxes on electronic commerce. The Internet Tax
Freedom Act also provides that there is no federal tax on Internet access or
electronic commerce. The three year moratorium is set to expire in late 2002.

A number of pending bills would, if enacted:

. establish standards for use of digital signatures in place of
traditional signatures;

. provide privacy rights to users by regulating the use of information
collected on-line;

. provide remedies against entities engaged in "cybersquatting" (the
unauthorized registration of another company's trademark as an Internet
domain name); and

. loosen currently strict restrictions on the export of encryption-based
software products such as those used to provide security in electronic
commerce transactions.

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.

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>

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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 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 and
Development 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>
<S> <C>
.San Francisco, California .Boston and Cambridge, Massachusetts
.Denver, Colorado .McLean, 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 compensation committee adopted, and our board of
directors ratified 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 from 6.1 million shares of existing common
stock, increased by 17.5% of the number of shares of existing common
stock authorized for issuance after March 7, 1997 by our board of
directors, to an aggregate of:

. million shares of SNC stock, increased by % of the number of
shares of SNC stock authorized for issuance after the effective date
of the amended plan by our board of directors; and

. million shares of circle.com stock, increased by % of the
number of shares of circle.com stock authorized for issuance after
the effective date of the amended plan by our board of directors.

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 will be exercisable for shares of circle.com stock SNC stock or
both. In order to provide for this, 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 will 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.

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Summary of the Stock Incentive Plan

Shares Subject to the Stock Incentive Plan

Subject to adjustment as discussed below, we will make available under the
stock incentive plan:

. million shares of SNC stock, increased by % of the number of shares
of SNC stock authorized for issuance after the effective date of the
amended plan by our board of directors; and

. million shares of circle.com stock, increased by % of the number of
shares of circle.com stock authorized for issuance after the effective
date of the amended plan by our board of directors.

Types of Awards under the Stock Incentive Plan

Awards granted under the stock incentive plan may be in any combination of
the following:

. stock options to purchase shares of either SNC stock or circle.com
stock;

. stock appreciation rights. These are rights to receive the spread or
difference between the fair market value of shares subject to an option
and the corresponding exercise price of the option. The spread may be
payable in either stock, cash or both; and

. restricted stock. These are awards of stock on which various
restrictions and conditions are imposed which must be satisfied in order
for the award to vest in the participant.

Eligibility

Under the terms of the stock incentive plan,

. directors,

. officers,

. employees and

. consultants

of Snyder Communications and its subsidiaries designated by the compensation
committee administering the stock plan are 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

The compensation committee of our board of directors will administer the
stock incentive plan. The compensation committee may delegate its authority to
make grants of stock options and stock appreciation rights to persons below the
rank of Senior Vice President.

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.

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Option Vesting and Exercising. The compensation 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 from
the date of its grant. The compensation 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.

Termination of Employment. The compensation 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, his or her options will cease to
vest immediately and the 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.

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 at an
exercise price of $28.125 per share. 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 at an exercise price of $28.125 per share. 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 260,000 shares of our existing common stock at an exercise
price of $17.00 per share and 200,000 shares of our existing common
stock at an exercise price of $20.625 per share. 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 12,206,565
shares of our existing common stock at a weighted average price of
$25.04 per share. Following the recapitalization, these options will
be exercisable for shares of SNC stock, shares of circle.com stock
or both.

Following the recapitalization, these options will be adjusted as described
under "--Adjustments of Existing Stock Option Awards."

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.

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 compensation committee will determine the form of payment, which may be in
cash, either class of common stock or any combination of cash and stock.

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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.

Restricted Stock

The compensation committee may make restricted stock awards in SNC stock and
circle.com stock. The compensation 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 an 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.

Awards of restricted stock granted under the Plan may qualify for the
performance-based compensation exemption to Section 162(m) of the Code. As
determined by the compensation committee in its sole discretion, either the
granting or vesting of these performance-based awards will be based upon
achievement of hurdle rates and/or growth in one or more of the following
business criteria:

. net earnings;

. earnings per share;

. net sales growth;

. market share;

. net operating profit;

. expense targets;

. working capital targets relating to accounts receivable;

. operating margin;

. return on equity;

. return on assets;

. planning accuracy (as measured by comparing planned results to actual
results);

. market price per share; and

. total return to stockholders.

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In addition, these performance-based awards may include comparisons to the
performance of other companies, which would be measured by one or more of the
criteria listed above. With respect to these performance-based awards, the
compensation committee will establish in writing the performance goals
applicable to a given period, and these goals will state, in terms of an
objective formula or standard, the method for computing the amount of
compensation payable to the participant if the performance goals are obtained.
The compensation committee will also establish in writing the individual
employees or class of employees to which the performance goals apply no later
than 90 days after the commencement of the period (but in no event after 25% of
the period has elapsed). No performance-based awards shall be payable to, or
vest with respect to, any participant for a given fiscal period until the
compensation committee certifies in writing that the objective performance
goals (and any other material terms) applicable to the period have been
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;

. change the performance criteria; or

. remove the administration of the stock incentive plan from the committee
administering the plan.

Non-Transferability of Options

Except as provided by the compensation committee, other than with respect to
incentive options, awards may (1) not be transferred by a participant during
the participant's lifetime, (2) not be assigned or otherwise disposed of except
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.

Corporate Changes

The stock incentive plan provides that the compensation committee may adjust,
as it deems appropriate, the maximum number of shares that may be subject to
options or awards or that may be granted to any individual in any calendar
year, 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 compensation
committee may accelerate vesting 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 each holder of an

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outstanding award will receive a corresponding award based upon shares of
either SNC stock, circle.com stock or both. 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 compensation
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
compensation 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 compensation 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 compensation 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.

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.

Stock Options and Stock Appreciation Rights. An individual who receives an
option or a stock appreciation right will not recognize any taxable income upon
the grant of an option or right. However, the individual generally will
recognize ordinary income upon exercise of an option 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.

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The ordinary income recognized with respect to the receipt of shares or cash
upon exercise of an option 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 a stock
apprecation right for shares or upon the exercise of an option, 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 option 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, 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 option 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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If the transfer of the option constitutes a completed gift and the individual
retains no interest in or power over the option after the transfer, the option
generally will not be included in his or her gross estate for federal estate
tax purposes. The transfer of the option will not cause the transferee to
recognize taxable income at the time of the transfer. If the transferee
exercises the option while the transferor is alive, the transferor will
recognize ordinary income as described above as if the transferor had exercised
the option. If the transferee exercises the option after the death of the
transferor, it is uncertain whether the transferor's estate or the transferee
will recognize ordinary income for federal income tax purposes.

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.

Certain Limitations on Deductibility of Executive Compensation. With certain
exceptions, Section 162(m) of the Code denies a deduction to publicly held
corporations for compensation paid to certain executive officers in excess of
$1 million per executive per taxable year (including any deduction with respect
to the exercise of an option or stock appreciation right). One of these
exceptions applies to performance-based compensation that has, among other
things, been approved by stockholders in a separate vote. If the amended plan
is approved by our stockholders, we believe that performance-based awards
granted prior to the first stockholder meeting in 2004 under the amended plan
and those stock options and stock appreciation rights granted by the
compensation committee under the amended plan should qualify for the
performance-based compensation exception to Section 162(m) of the Code.

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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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.

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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.

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 pursuant to rules and procedures established by the
administrative committee. 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 (1) 800 shares of SNC stock and (2) 200 shares of circle.com 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.

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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 for 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 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.

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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, for every dollar in a participant's
account $0.80 will be applied to purchase shares of SNC stock and $0.20 will
be applied to purchase shares of circle.com stock under the plan for that
purchase period.

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

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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.

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.

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MANAGEMENT

As of the date of this proxy statement and prospectus, the directors and
executive officers of Snyder Communications, their ages, the positions held by
them and the periods during which they have served in these positions were as
follows. These persons will continue to hold these positions following the
recapitalization and will continue to have the same general responsibilities
that they had prior to the recapitalization.

<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................... 37 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 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

122
<PAGE>

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.

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 and
prospectus, we have not granted any stock appreciation rights or restricted
stock awards to these persons.

123
<PAGE>

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, 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.

124
<PAGE>

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.......................................... 33 20 3/4
Third Quarter (through August 26)....................... 32 1/2 16 1/8
</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 August 26, 1999, there were 72,688,315 shares of our existing common
stock outstanding and 568 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.

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 fee of approximately $10,000 for
their services plus out-of-pocket expenses. 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."

125
<PAGE>

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 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. 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 accounting and
auditing.

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 accounting and auditing.

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

126
<PAGE>

SNYDER COMMUNICATIONS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Snyder Communications, Inc.
Consolidated Financial Statements
The consolidated financial statements of Snyder Communications, Inc.
include all of the accounts and operating results of the corresponding
SNC and circle.com financial statements. Holders of SNC stock and
circle.com stock are stockholders of Snyder Communications, Inc. and are
subject to all risks associated with an investment in Snyder
Communications, Inc.
Report of Independent Public Accountants................................. F-3
Consolidated Balance Sheet as of December 31, 1998 and 1997 and June 30,
1999 (unaudited)........................................................ F-4
Consolidated Statement of Income, including unaudited pro forma data, for
the years ended December 31, 1998, 1997 and 1996 and the six months
ended June 30, 1999 (unaudited)
and June 30, 1998 (unaudited)........................................... F-5
Consolidated Statement of Equity and Comprehensive Income for the years
ended
December 31, 1998, 1997 and 1996 and the six months ended June 30, 1999
(unaudited)............................................................. F-6
Consolidated Statement of Cash Flows for the years ended December 31,
1998, 1997 and 1996
and the six months ended June 30, 1999 (unaudited) and June 30, 1998
(unaudited)............................................................. F-8
Notes to Consolidated Financial Statements............................... F-10
Brann Holdings Limited
Report of Independent Accountants........................................ F-38
American List Corporation
Report of Independent Certified Public Accountants....................... F-39
SNC
Combined Financial Statements
The combined financial statements of SNC comprise the combined financial
position, results of operations and cash flows of the businesses that
comprise Snyder Communications, Inc.'s direct marketing and advertising
agency and also includes SNC's 20% retained interest in circle.com which
is accounted for in a manner consistent with the equity method. The SNC
stock is intended to separately reflect the performance of SNC, however
a holder of SNC stock is a stockholder of Snyder Communications, Inc.
Accordingly, the SNC combined financial statements are supplemental
financial statements and should be read in conjunction with the Snyder
Communications, Inc. financial statements and the circle.com financial
statements.
Report of Independent Public Accountants................................. F-40
Combined Balance Sheet as of December 31, 1998 and 1997 and June 30, 1999
(unaudited)............................................................. F-41
Combined Statement of Income, including unaudited pro forma data, for the
years ended
December 31, 1998, 1997 and 1996 and the six months ended June 30, 1999
(unaudited) and June 30, 1998 (unaudited)............................... F-42
Combined Statement of Changes in Group Equity for the years ended
December 31, 1998, 1997 and 1996 and the six months ended June 30, 1999
(unaudited)............................................................. F-43
Combined Statement of Cash Flows for the years ended December 31, 1998,
1997 and 1996 and the six months ended June 30, 1999 (unaudited) and
June 30, 1998 (unaudited)............................................... F-44
Notes to Combined Financial Statements................................... F-46
Brann Holdings Limited
Report of Independent Accountants........................................ F-74
American List Corporation
Report of Independent Certified Public Accountants....................... F-75
</TABLE>

F-1
<PAGE>

<TABLE>
<CAPTION>
Page
----
<S> <C>
Circle.com
Combined Financial Statements
The combined financial statements of circle.com comprise the combined
financial position, results of operations and cash flows of the
businesses that comprise Snyder Communications, Inc.'s Internet
professional services business. The circle.com stock is intended
separately to track the performance of circle.com, however a holder of
circle.com stock is a stockholder in Snyder Communications, Inc.
Accordingly, the circle.com financial statements are supplemental
financial statements and should be read in conjunction with the Snyder
Communications, Inc. and SNC financial statements.
Report of Independent Public Accountants................................. F-76
Combined Balance Sheet as of December 31, 1998 and 1997 and June 30, 1999
(unaudited)............................................................. F-77
Combined Statement of Operations including unaudited pro forma data, for
the years
ended December 31, 1998, 1997 and 1996 and the six months ended June 30,
1999 (unaudited) and 1998 (unaudited)................................... F-78
Combined Statement of Changes in Group Equity for the years ended
December 31, 1998, 1997 and 1996 and the six months ended June 30, 1999
(unaudited)............................................................. F-79
Combined Statement of Cash Flows for the years ended December 31, 1998,
1997 and 1996
and the six months ended June 30, 1999 (unaudited) and 1998 (unaudited)
........................................................................ F-80
Notes to Combined Financial Statements................................... F-81
</TABLE>

F-2
<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

Vienna, VA
June 22, 1999

F-3
<PAGE>

SNYDER COMMUNICATIONS, INC.
(See Note 1)

Consolidated Balance Sheet
(in thousands)

<TABLE>
<CAPTION>
June 30, December 31,
---------- ------------------
1999 1998 1997
---------- -------- --------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current
assets:
Cash and equivalents.......................... $ 48,592 $ 47,931 $ 71,789
Marketable securities......................... -- 612 1,241
Accounts receivable, net of allowance for
doubtful accounts of $6,472, $7,031 and
$3,893 at June 30, 1999, December 31, 1998
and 1997, respectively....................... 100,874 78,901 68,365
Receivables from pass-through costs........... 98,752 86,015 77,221
Related party receivables..................... 192 190 1,428
Unbilled services............................. 15,145 19,708 13,960
Current portion of deferred tax asset......... 9,957 13,671 8,357
Other current assets.......................... 28,120 11,560 14,126
Net current assets of discontinued
operations................................... 44,977 24,447 --
-------- -------- --------
Total current assets........................ 346,609 283,035 256,487
-------- -------- --------
Property and equipment, net.................... 74,397 70,367 41,251
Goodwill and other intangible assets, net...... 198,474 72,288 42,660
Deferred tax asset............................. 86,696 86,637 --
Deposits and other assets...................... 6,148 5,645 8,198
Net long-term assets of discontinued
operations.................................... 113,794 95,280 33,541
-------- -------- --------
Total assets................................ $826,118 $613,252 $382,137
======== ======== ========
LIABILITIES AND
EQUITY
Current liabilities:
Lines of credit............................... $ 24,101 $ 1,825 $ 9,175
Current maturities of long-term debt.......... 1,007 1,085 2,478
Accrued payroll............................... 20,009 13,423 10,777
Accounts payable.............................. 122,776 114,541 99,384
Accrued expenses.............................. 90,011 80,547 69,543
Client advances............................... 4,899 11,753 12,675
Unearned revenue.............................. 16,130 14,535 16,002
Net current liabilities of discontinued
operations................................... -- -- 23,170
-------- -------- --------
Total current liabilities................... 278,933 237,709 243,204
-------- -------- --------
Related party borrowings....................... 8,172 8,924 7,072
Long-term obligations under capital leases..... 1,491 1,743 1,849
Long-term debt, net of current maturities...... 1,616 1,616 3,935
Other liabilities.............................. 3,954 2,922 2,538
Commitments and contingencies
Redeemable ESOP stock, 93, 88 and 147 shares
outstanding at June 30, 1999, December 31,
1998 and 1997, respectively................... 2,954 2,960 5,278
Equity:
Preferred stock, $.001 par value per share,
5,000 shares authorized, none issued and
outstanding at June 30, 1999, December 31,
1998 and 1997................................ -- -- --
Common stock, $.001 par value per share,
400,000, 400,000 and 120,000 shares
authorized, 76,522, 71,480 and 67,950 shares
issued and outstanding at June 30, 1999,
December 31, 1998 and 1997, respectively..... 77 71 68
Additional paid-in capital.................... 511,256 375,114 180,086
Treasury stock, at cost, 1,053 shares at
December 31, 1997............................ -- -- (42,705)
Accumulated other comprehensive income
(loss)....................................... (2,871) 1,829 640
Retained earnings (deficit)................... 20,536 (19,636) (19,828)
-------- -------- --------
Total equity................................ 528,998 357,378 118,261
-------- -------- --------
Total liabilities and equity................ $826,118 $613,252 $382,137
======== ======== ========
</TABLE>

The accompanying notes are an integral part of this consolidated balance sheet.

F-4
<PAGE>

SNYDER COMMUNICATIONS, INC.
(See Note 1)

CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share amounts)

<TABLE>
<CAPTION>
For the
Six Months Ended For the Years
June 30, Ended December 31,
------------------ ----------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
Net revenues................ $299,426 $228,189 $493,803 $403,072 $349,223
Operating expenses:
Cost of services........... 200,736 149,492 322,980 273,899 236,793
Selling, general and
administrative expenses... 51,134 48,008 96,362 93,371 77,705
Compensation to
stockholders.............. -- 382 573 12,422 4,939
ESOP expense............... -- -- -- 5,411 6,553
Acquisition and related
costs..................... 1,382 22,597 38,941 31,389 --
-------- -------- -------- -------- --------
Income (loss) from
operations................. 46,174 7,710 34,947 (13,420) 23,233
Interest expense, including
amounts to related parties
of $164, $290, $541, $1,491
and $2,103 in the six
months ended June 30, 1999
and 1998 and the years
ended 1998, 1997 and 1996,
respectively............... (696) (1,014) (1,753) (3,178) (5,385)
Investment income........... 1,237 1,614 3,638 2,944 2,371
-------- -------- -------- -------- --------
Income (loss) from
continuing operations
before income taxes........ 46,715 8,310 36,832 (13,654) 20,219
Income tax provision ....... 19,188 1,762 15,472 2,982 4,738
-------- -------- -------- -------- --------
Income (loss) from
continuing operations...... 27,527 6,548 21,360 (16,636) 15,481
Income (loss) from
discontinued operations
(net of income taxes)...... 12,639 2,618 1,446 (10,225) (1,415)
-------- -------- -------- -------- --------
Income (loss) before
extraordinary item......... 40,166 9,166 22,806 (26,861) 14,066
Extraordinary item, less
applicable income taxes of
$806....................... -- -- -- -- (1,216)
-------- -------- -------- -------- --------
Net income (loss)...... $ 40,166 $ 9,166 $ 22,806 $(26,861) $ 12,850
======== ======== ======== ======== ========
Historical net income (loss)
per share:
Basic net income (loss)
per share:
Continuing operations.... $ 0.38 $ 0.09 $ 0.31 $ (0.26) $ 0.26
Discontinued operations.. 0.17 0.04 0.02 (0.16) (0.02)
Extraordinary item....... -- -- -- -- (0.02)
-------- -------- -------- -------- --------
Total basic net income
(loss) per share.......... $ 0.55 $ 0.13 $ 0.33 $ (0.42) $ 0.22
======== ======== ======== ======== ========
Diluted net income (loss)
per share:
Continuing operations.... $ 0.37 $ 0.09 $ 0.30 $ (0.26) $ 0.26
Discontinued operations.. 0.17 0.04 0.02 (0.16) (0.02)
Extraordinary item....... -- -- -- -- (0.02)
-------- -------- -------- -------- --------
Total diluted net income
(loss) per share.......... $ 0.54 $ 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.... $ 0.38 $ 0.06 $ 0.27 $ (0.30) $ 0.19
Discontinued operations.. 0.17 0.04 0.02 (0.18) (0.06)
Extraordinary item....... -- -- -- -- (0.02)
-------- -------- -------- -------- --------
Total basic net income
(loss) per share.......... $ 0.55 $ 0.10 $ 0.29 $ (0.48) $ 0.11
======== ======== ======== ======== ========
Diluted net income (loss)
per share:
Continuing operations.... $ 0.37 $ 0.06 $ 0.26 $ (0.30) $ 0.19
Discontinued operations.. 0.17 0.04 0.02 (0.18) (0.06)
Extraordinary item....... -- -- -- -- (0.02)
-------- -------- -------- -------- --------
Total diluted net income
(loss) per share.......... $ 0.54 $ 0.10 $ 0.28 $ (0.48) $ 0.11
======== ======== ======== ======== ========
</TABLE>

The accompanying notes are an integral part of this consolidated statement of
income.

F-5
<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..........
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............
<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......... --
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-6
<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..........
Balance, December
31, 1998......... 71,480,000 $71 $375,114 $(19,636) $-- $-- $ -- $ 1,829 $357,378
Exercise of
stock options
(unaudited)..... 587,000 2 16,139 -- -- -- -- -- 16,141
Issuance of
shares for
purchase of
subsidiaries and
property
(unaudited)..... 4,455,000 4 120,003 -- -- -- -- -- 120,007
Foreign currency
translation
adjustment
(unaudited)..... -- -- -- -- -- -- -- (4,689) (4,689)
Unrealized loss
on marketable
securities
(unaudited)..... -- -- -- -- -- -- -- (11) (11)
Reclassification
of redeemable
ESOP stock
(unaudited)..... -- -- -- 6 -- -- -- -- 6
Net income
(unaudited)..... -- -- -- 40,166 -- -- -- -- 40,166
Comprehensive
income
(unaudited).....
---------- --- -------- -------- ---- ---- ------- ------- --------
Balance, June 30,
1999
(unaudited)...... 76,522,000 $77 $511,256 $ 20,536 $ -- $ -- $ -- $(2,871) $528,998
========== === ======== ======== ==== ==== ======= ======= ========
<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.........
Exercise of
stock options
(unaudited)..... $ --
Issuance of
shares for
purchase of
subsidiaries and
property
(unaudited)..... --
Foreign currency
translation
adjustment
(unaudited)..... (4,689)
Unrealized loss
on marketable
securities
(unaudited)..... (11)
Reclassification
of redeemable
ESOP stock
(unaudited)..... --
Net income
(unaudited)..... 40,166
-------------
Comprehensive
income
(unaudited)..... $35,466
=============
Balance, June 30,
1999
(unaudited)......
</TABLE>

The accompanying notes are an integral part of this consolidated statement of
equity and comprehensive income.

F-7
<PAGE>

SNYDER COMMUNICATIONS, INC.
(See Note 1)

CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)

<TABLE>
<CAPTION>
For the Six
Months
Ended June 30, 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........... $ 27,527 $ 6,548 $ 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....... 12,921 8,033 17,527 13,517 12,898
Loss on repayment of
subordinated debt.. -- -- -- -- 2,021
Noncash charge from
accelerated vesting
of acquired
subsidiary
options............ -- 59 1,862 9,097 --
Noncash ESOP
expense............ -- -- -- 4,851 5,282
Deferred taxes...... 3,687 (11,717) (13,327) (7,501) (2,957)
Loss on disposal of
assets............. 401 147 600 3,011 1,029
Other noncash
amounts............ -- -- (9) 2,114 2,259
Changes in assets and
liabilities:
Accounts receivable,
net................ (7,912) (15,422) (1,433) (26,298) (5,513)
Receivables from
pass-through
costs.............. (12,737) (8,700) (8,794) (11,592) (28,998)
Related party
receivables........ (116) 621 1,238 776 945
Unbilled services... 7,479 5,601 (4,813) (3,182) (3,199)
Deposits and other
assets............. (497) 77 2,592 1,065 (551)
Other current
assets............. (10,059) 527 632 1,252 (4,177)
Accrued payroll,
accounts payable
and accrued
expenses........... 6,981 24,920 13,577 46,659 32,135
Client advances..... (6,855) (13,592) (2,630) -- --
Unearned revenue.... 928 (1,353) (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......... 21,748 (4,251) 26,495 19,024 35,178
-------- -------- ---------- ---------- ----------
Cash flows from
investing activities of
continuing operations:
Purchase of
subsidiaries, net of
cash acquired........ (29,254) (6,179) (14,408) (22,518) --
Purchase of property
and equipment........ (14,051) (21,242) (35,654) (18,735) (11,796)
Proceeds from sale of
equipment............ -- 7 7 50 74
Net sales of
marketable
securities........... 612 339 575 5,807 2,052
Purchase of intangible
assets............... (3,661) (431) (1,480) (729) (1,974)
Note and net advances
to stockholders of
acquired
subsidiaries......... -- 917 942 1,467 --
Impact from differing
fiscal year ends..... -- -- -- (446) --
-------- -------- ---------- ---------- ----------
Net cash used in
investing activities
of continuing
operations........... (46,354) (26,589) (50,018) (35,104) (11,644)
-------- -------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of this consolidated statement of
cash flows.

F-8
<PAGE>

SNYDER COMMUNICATIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS--(Continued)
(in thousands)

<TABLE>
<CAPTION>
For the
Six Months For the Years Ended
Ended June 30, 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..................... (70) (909) (1,740) (29,795) (3,388)
Proceeds from issuance of
subordinated debentures due to
related parties................ -- -- -- 425 294
Repayment of subordinated
debentures due to related
parties........................ -- -- -- -- (6,900)
Distributions and dividends..... -- (3,854) (6,161) (7,755) (31,872)
Proceeds (repayment) from long-
term debt...................... 449 6,669 (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................ 22,276 (7,230) (7,595) (1,306) (2,464)
Payments on capital lease
obligations.................... (877) (991) (2,087) (2,102) (1,115)
Proceeds from exercise of
options........................ 13,707 11,414 21,053 25,128 425
Proceeds from stock issuances... -- 24,351 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................... 35,485 27,354 41,739 18,620 12,312
Effect of exchange rate
changes........................ 1,009 83 679 383 1,096
------- ------- ------- ------- -------
Net increase (decrease) in cash
and equivalents of continuing
operations..................... 11,888 (3,403) 18,895 2,923 36,942
Investments and advances (to)
from discontinued operations... (11,227) (14,080) (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......................... $48,592 $54,306 $47,931 $71,789 $68,699
======= ======= ======= ======= =======
Disclosure of supplemental cash
flow information:
Cash paid for interest
including dividends on
mandatorily redeemable
preferred stock................ 810 481 2,681 2,667 4,066
Cash paid for income taxes...... 5,025 5,106 13,811 7,726 8,276
Disclosure of noncash activities:
Equipment purchased under
capital leases................. -- 937 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................... 120,948 50,605 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......................... -- 3,484 3,484 -- --
Tax benefit from exercise of
stock options.................. 2,434 4,594 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 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-9
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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, Ventiv Health, Inc. for
every three 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

F-10
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

retroactively restated to reflect the pooling of interests transactions. During
1998 and 1997, the Company 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 differ from the Company's
financial statements previously filed in its Form 8-K and Form 10-K in March
1999 as they have been restated to reflect the net assets and operating results
of the healthcare services business as a discontinued operation 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 Brann Worldwide, Bounty SCA Worldwide and Arnold Worldwide
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 Brann Worldwide, 8,983,714 were to companies that operate through
Bounty SCA Worldwide and 3,489,539 were to companies that operate through
Arnold Worldwide. The Brann Worldwide 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 Worldwide 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 six months ended June 30, 1999 and June 30, 1998, of the Company
and the Pooled Entities through the dates of their respective Acquisitions:

F-11
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

<TABLE>
<CAPTION>
For the Six
Months Ended June For the Years Ended
30, December 31,
----------------- ----------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
(in thousands)
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues:
The Company................. $299,426 $197,960 $402,688 $160,783 $ 82,840
Pooled Entities............. -- 30,229 91,115 242,289 266,383
-------- -------- -------- -------- --------
$299,426 $228,189 $493,803 $403,072 $349,223
======== ======== ======== ======== ========
Net income (loss) from
continuing operations:
The Company................. $ 27,527 $ 14,574 $ 32,206 $ 5,589 $ 8,193
Pooled Entities............. -- (8,026) (10,846) (22,225) 7,288
-------- -------- -------- -------- --------
$ 27,527 $ 6,548 $ 21,360 $(16,636) $ 15,481
======== ======== ======== ======== ========
</TABLE>

During 1998, the Company completed several purchase business combinations for
total consideration paid of approximately $5.7 million (152,411 shares of
Snyder 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.

During 1999, the Company completed several purchase business combinations
including Media Syndication Global ("MSG") (March 30, 1999), Broadwell
Marketing Group ("Broadwell") (May 21, 1999), Natural Intelligence, Inc.
("Natural Intelligence") (June 24, 1999) and Tsunami Consulting Group, Inc.
("Tsunami") (June 25, 1999). MSG was acquired for total consideration paid of
approximately $66.4 million and consisted of 2,470,341 shares of Snyder common
stock and resulted in $65.2 million of additional goodwill. Broadwell was
acquired for total consideration paid of approximately $20.6 million and
consisted of 411,909 shares of Snyder common stock and $9.2 million in cash and
resulted in $20.0 million of additional goodwill. Natural Intelligence was
acquired for total consideration paid of approximately $7.4 million and
consisted of 157,918 shares of Snyder common stock and $2.8 million in cash and
resulted in $7.7 million of additional goodwill. Tsunami was acquired for total
consideration of approximately $29.0 million and consisted of 686,583 shares of
Snyder common stock and $9.5 million in cash and resulted in $30.3 million of
additional goodwill. In August of 1999, the Company entered into a definitive
agreement to acquire Interactive Bureau for total consideration of
approximately $28.8 million ($8.8 million in cash and $20.0 million in
circle.com stock). The acquisition is expected to close immediately after the
Recapitalization.

The following table presents pro forma financial information as if the 1998
and 1999 purchase business combinations 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 Six For the Years
Months Ended June Ended December
30, 31,
----------------- -----------------
1999 1998 1998 1997
-------- -------- -------- --------
(unaudited)
(In thousands, except per share
data)
<S> <C> <C> <C> <C>
Pro forma revenues....................... $326,326 $261,662 $573,663 $468,954
Pro forma net income (loss).............. $ 29,380 $ 3,932 $ 16,668 $(34,201)
Pro forma net income (loss) per share--
basic................................... $ 0.39 $ 0.05 $ 0.23 $ (0.51)
Pro forma net income (loss) per share--
diluted................................. $ 0.38 $ 0.05 $ 0.22 $ (0.51)
</TABLE>

F-12
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

The Company's other purchase business combinations are immaterial to the
consolidated financial statements.

Unaudited Interim Financial Statements

The accompanying unaudited consolidated balance sheet as of June 30, 1999 and
the consolidated statements of income and cash flows for the six months ended
June 30, 1999 and June 30, 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. 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, in accordance with
Accounting Principles Board Opinion No. 16, "Business Combinations," 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 June 30, 1999 and the results of operations and cash
flows for the six months ended June 30, 1999 and June 30, 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:

During the six months ended June 30, 1999, no one client represented more
than 10.0% of the Company's total revenue. 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.

F-13
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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.

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.

F-14
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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.

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

F-15
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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 table below presents this pro forma calculation of net income (loss):

<TABLE>
<CAPTION>
For the Six
Months Ended For the Years Ended
June 30, 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................. $ 46,715 $ 8,310 $ 36,832 $(13,654) $20,219
Pro forma benefit (provision)
for income taxes............. (19,188) (4,161) (18,133) (5,537) (8,821)
-------- ------- -------- -------- -------
Pro forma income (loss) from
continuing operations........ 27,527 4,149 18,699 (19,191) 11,398
Discontinued operations, less
applicable pro forma income
taxes of $(8,563), $(6,795),
$(12,849), $(3,309) and
$(3,713) for the six-months
ended June 30, 1999 and 1998
and December 31, 1998, 1997
and 1996, respectively....... 12,639 2,618 1,446 (11,601) (3,624)
Extraordinary item, less
applicable income taxes of
$806......................... -- -- -- -- (1,216)
-------- ------- -------- -------- -------
Pro forma net income (loss)... $ 40,166 $ 6,767 $ 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

F-16
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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

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 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 $(2.9) million, $1.8 million and
$0.6 million as of June 30, 1999, December 31, 1998 and 1997, respectively. The
cumulative unrealized gain on marketable securities was $0, $11,000 and $64,000
as of June 30, 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

F-17
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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.

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-18
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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-19
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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-20
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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, maturing January 1, 2000........................ $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, maturing August 2000.................. -- 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-21
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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-22
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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-23
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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 six months ended June 30, 1999, the Company recorded $1.4 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 six months ended June 30, 1999 consists of
consulting services and other costs related to these integration activities. As
of June 30, 1999, 36 employees had terminated employment with the Company and
$2.5 million had been charged against the total liability of $4.0 million.

The integration activities recorded in 1998 were recorded in accordance with
Emerging Issues Task Force No. 94-3 "Liability Recognition for Costs to Exit an
Activity (including certain costs incurred in a restructuring)" ("EITF 94-3").
Additional expenses for the Company's integration activities recorded in 1999
represent additional costs incurred that did not qualify for accrual at
December 31, 1998 in accordance with EITF 94-3.

During the six months ended June 30, 1998, the Company recorded $23.0 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.

The following table summarizes the activity in the integration activities
liability account:

<TABLE>
<CAPTION>
Beginning Deductions for Balance at End
Balance Additions Amounts Paid of Period
--------- --------- -------------- --------------
<S> <C> <C> <C> <C>
Year Ended December 31,
1998....................... $ -- 2,625 (305) $2,320
Six Months Ended June 30,
1999....................... $2,320 1,383 (2,197) $1,506
</TABLE>

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.

F-24
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999
and 1998 is unaudited)

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.

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.

F-25
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999
and 1998 is unaudited)

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.

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%.

F-26
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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:

<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.................................... (0.19) (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, circle.com stock, or both.
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.

F-27
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

<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>

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>

F-28
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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.

<TABLE>
<CAPTION>
For the
Six Months
Ended June For the Years Ended December
30, 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..... 73,637 68,494 69,587 63,752 59,194
Diluted impact of stock options and
other dilutive securities......... 1,295 2,572 2,425 -- 798
------ ------ ------ ------ ------
Shares used in computation of
diluted net income per share...... 74,932 71,066 72,012 63,752 59,992
====== ====== ====== ====== ======
</TABLE>

For the six months ended June 30, 1999 and 1998 and the years ended December
31, 1998 and 1997, there existed weighted average common stock equivalents of
258,421, 531,091, 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.

F-29
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

16. Discontinued Operations:

Ventiv Health, 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, Ventiv Health, Inc. ("Ventiv"), 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
Ventiv for every three shares of the Company's existing common stock. Following
the distribution, Ventiv will become an independent, publicly traded
corporation. Accordingly, the results of Ventiv 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 Ventiv operations is presented in the
following tables:

Earnings from discontinued Ventiv operations included in the Consolidated
Statement of Income are as follows (in thousands):

<TABLE>
<CAPTION>
For the Six Months For the Years Ended
Ended June 30, December 31,
-------------------- ----------------------------
1999 1998 1998 1997 1996
--------- --------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues................ $ 181,259 $ 151,313 $321,500 $208,967 $144,704
Operating expenses:
Cost of services...... 137,028 109,677 236,047 156,346 104,922
Selling, general and
administrative
expenses............. 21,585 19,929 43,029 32,787 25,960
Compensation to
stockholders......... -- 515 742 15,638 12,340
Recapitalization
costs................ -- -- -- 1,889 --
Acquisition and
related costs........ 1,694 11,356 26,922 8,042 --
--------- --------- -------- -------- --------
Income (loss) from
operations............. 20,952 9,836 14,760 (5,735) 1,482
Interest income
(expense), net......... 250 (423) (465) (1,049) 105
--------- --------- -------- -------- --------
Income (loss) from
operations before
income taxes........... 21,202 9,413 14,295 (6,784) 1,587
Income tax provision.... (8,563) (6,795) (12,849) (1,934) (1,504)
--------- --------- -------- -------- --------
Net income (loss)....... $ 12,639 $ 2,618 $ 1,446 $ (8,718) $ 83
========= ========= ======== ======== ========
</TABLE>

F-30
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

The components of net assets (liabilities) of discontinued Ventiv operations
included in the Consolidated Balance Sheet are as follows (in thousands):

<TABLE>
<CAPTION>
June 30, December 31,
----------- ----------------
1999 1998 1997
----------- -------- -------
(unaudited)
<S> <C> <C> <C>
Cash and equivalents.............................. $ 21,347 $ 25,664 $18,040
Accounts receivable, net.......................... 55,812 43,521 29,331
Unbilled services................................. 25,998 15,212 6,769
Other............................................. 9,871 11,052 9,101
-------- -------- -------
Total current assets............................ 113,028 95,449 63,241
-------- -------- -------
Lines of credit................................... 76 198 22,875
Accounts payable and accrued expenses............. 55,674 60,393 49,274
Unearned revenue.................................. 7,357 8,446 14,125
Other............................................. 4,944 1,965 137
-------- -------- -------
Total current liabilities....................... 68,051 71,002 86,411
-------- -------- -------
Net current assets (liabilities)................ 44,977 24,447 (23,170)
-------- -------- -------
Property and equipment, net....................... 13,455 10,028 4,880
Goodwill and other intangibles.................... 96,103 80,728 26,283
Other............................................. 5,509 7,439 6,543
-------- -------- -------
Total long-term assets.......................... 115,067 98,195 37,706
Total long-term liabilities..................... 1,273 2,915 4,165
-------- -------- -------
Net long-term assets............................ 113,794 95,280 33,541
-------- -------- -------
Total net assets of discontinued operations..... $158,771 $119,727 $10,371
======== ======== =======
</TABLE>

The cash flow provided by (used in) discontinued Ventiv operations was as
follows (in thousands):

<TABLE>
<CAPTION>
For the Six Months For the Years Ended
Ended June 30, December 31,
--------------------- --------------------------
1999 1998 1998 1997 1996
---------- --------- -------- ------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Operating activities of
discontinued operations:
Income (loss) from
discontinued operations..... $ 12,639 $ 2,618 $ 1,446 $(8,718) $ 83
Adjustments to reconcile
income (loss) from
discontinued operations to
net cash provided by (used
in) operating activities.... 4,722 2,916 9,133 (2,308) 325
Net change in assets and
liabilities................. (28,111) (3,157) (11,800) 9,102 510
---------- -------- -------- ------- -------
Net cash provided by (used
in) operating activities.... (10,750) 2,377 (1,221) (1,924) 918
---------- -------- -------- ------- -------
Net cash used in investing
activities ................. (3,144) (4,931) (7,190) (3,576) (1,699)
---------- -------- -------- ------- -------
Investments and advances from
Snyder...................... 11,227 14,080 42,753 (167) (7,998)
Other financing activities... (1,761) (6,152) (26,917) 16,618 (758)
---------- -------- -------- ------- -------
Net cash provided by (used
in) financing activities.... 9,466 7,928 15,836 16,451 (8,756)
---------- -------- -------- ------- -------
Net cash provided by (used
in) discontinued operations
before effect of exchange
rate changes on cash........ (4,428) 5,374 7,425 10,951 (9,537)
Effect of exchange rate
changes on cash............. 111 7 199 (177) 76
---------- -------- -------- ------- -------
Cash flow provided by (used
in) discontinued
operations.................. $ (4,317) $ 5,381 $ 7,624 $10,774 $(9,461)
========== ======== ======== ======= =======
</TABLE>

F-31
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

During the year ended December 31, 1998, Ventiv 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.
Ventiv 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
Ventiv's workforce. Ventiv 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 Ventiv and $2.7 million had been
charged against the total liability, including $1.5 million in severance and
related payments.

During the six months ended June 30, 1999, Ventiv recorded $1.7 million in
nonrecurring acquisition and related costs. This amount is for additional costs
necessary to consolidate and integrate certain of Ventiv's acquired operations
in the U.S. and U.K. under Ventiv's plan initiated in 1998. The charge recorded
in 1999 consists of $1.3 million in severance and related costs associated with
the termination of 23 employees, and $0.4 million in consulting services and
other costs related to these integration activities. As of June 30, 1999, 149
employees had terminated employment with Ventiv and $9.1 million had been
charged against the total liability of $12.4 million.

The following table summarizes the activity in the Ventiv integration
activities liability account:

<TABLE>
<CAPTION>
Beginning Deductions for Balance at End
Balance Additions Amounts Paid of Period
--------- --------- -------------- --------------
<S> <C> <C> <C> <C>
Year Ended December 31,
1998....................... $ -- 10,654 (2,683) $7,971
Six Months Ended June 30,
1999....................... $7,971 1,696 (6,439) $3,228
</TABLE>

During the six months ended June 30, 1998, Ventiv 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 Ventiv's acquired operations in the U.S. and the U.K.

During 1999, Ventiv completed the acquisition of PromoTech Research
Associates, Inc. ("PromoTech") (March 25, 1999). The total consideration paid
was $16.3 million and consisted of 583,431 shares of Snyder common stock. This
purchase business combination has resulted in additional goodwill of $18.1
million. During 1998, Ventiv completed purchase business combinations,
including CLI Pharma S.A. ("CLI Pharma") (March 25, 1998) and Healthcare
Promotions, LLC ("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, Ventiv completed the acquisition of
Halliday Jones Ltd. ("HJ") (August 28, 1997), 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. This purchase
business combination has resulted in additional goodwill of $19.5 million. The
following table presents pro forma financial information as if the 1999
purchase of PromoTech, 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 Ventiv's operations had been taxed as a C corporation.

F-32
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

<TABLE>
<CAPTION>
For the Six For the Years
Months Ended Ended December
June 30, 31,
----------------- -----------------
1999 1998 1998 1997
-------- -------- -------- --------
(unaudited)
(in thousands, except per share
data)
<S> <C> <C> <C> <C>
Pro forma revenues....................... $183,186 $163,474 $335,628 $270,842
Pro forma net income (loss).............. $ 12,955 $ 3,268 $ 2,113 $ (8,759)
Pro forma net income (loss) per share--
basic................................... $ 0.18 $ 0.05 $ 0.03 $ (0.14)
Pro forma net income (loss) per share--
diluted................................. $ 0.17 $ 0.05 $ 0.03 $ (0.14)
</TABLE>

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 $18,574
2000...................................................... 960 16,553
2001...................................................... 343 14,892
2002...................................................... 301 11,020
2003...................................................... 171 7,651
Thereafter................................................ 5 27,008
------ -------
Total minimum lease payments.............................. 3,804 $95,698
=======
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-33
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999
and 1998 is unaudited)

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.

F-34
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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.

<TABLE>
<CAPTION>
For the
Six Months Ended For the Years Ended
June 30, December 31,
------------------ ----------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
(in thousands)
<S> <C> <C> <C> <C> <C>
Revenues:
circle.com................. $12,347 $4,830 $ 13,514 $ 5,567 $ 3,308
SNC........................ 287,388 223,359 480,289 397,505 345,915
Elimination of intersegment
revenues ................. (309) -- -- -- --
-------- -------- -------- -------- --------
Total.................... $299,426 $228,189 $493,803 $403,072 $349,223
-------- -------- -------- -------- --------
EBIT:
circle.com................. $ (1,798) $ 119 $ 498 $ (880) $ (714)
SNC........................ 49,354 30,570 73,963 36,682 35,439
-------- -------- -------- -------- --------
Total.................... $ 47,556 $ 30,689 $ 74,461 $ 35,802 $ 34,725
-------- -------- -------- -------- --------
Total Assets:
circle.com................. $ 58,253 $ 13,697 $ 2,932
SNC........................ 617,066 481,689 345,987
Discontinued operations.... 158,771 119,727 33,541
Elimination of SNC's
interest in circle.com ... (7,922) (1,821) (306)
Other unallocated amounts
.......................... (50) (40) (17)
-------- -------- --------
Total.................... $826,118 $613,252 $382,137
-------- -------- --------
Reconciliation of EBIT to
Income (Loss)
from Operations:
Total EBIT for operating
groups.................... $ 47,556 $ 30,689 $ 74,461 $ 35,802 $ 34,725
Compensation to
stockholders.............. -- 382 573 12,422 4,939
ESOP expense............... -- -- -- 5,411 6,553
Acquisition and related
costs..................... 1,382 22,597 38,941 31,389 --
-------- -------- -------- -------- --------
Income (loss) from
continuing operations..... $ 46,174 $ 7,710 $ 34,947 $(13,420) $ 23,233
-------- -------- -------- -------- --------
Geographic Information:
Revenues:
United States.............. $335,728 $296,774 $256,197
Western Europe............. 158,075 106,298 93,026
-------- -------- --------
Total.................... $493,803 $403,072 $349,223
-------- -------- --------
</TABLE>

F-35
<PAGE>

SNYDER COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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)........ (0.12) 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).............. (0.09) 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).......... (0.15) 0.24 0.14 0.04 0.28
</TABLE>

<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)(a)........... (0.15) 0.10 (0.12) (0.10) (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).... (0.15) 0.14 (0.29) (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).............. (0.16) 0.08 (0.12) (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).... (0.01) 0.03 (0.16) (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)(a) .......... (0.17) 0.11 (0.29) (0.14) (0.48)
</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-36
<PAGE>

22. Subsequent Events to June 30, 1999 Financial Statements (unaudited):

In August 1999, the Company entered into a $195 million, four-year unsecured
revolving credit facility with a bank (the "Lending Bank"). Interest on amounts
borrowed under the credit facility is based on the London Interbank Offered
Rate, the Lending Bank's base rate of interest or the federal funds rate.
Availability under this credit facility is subject to our compliance with
various financial ratios, operating covenants and other customary conditions.
On August 28, 1999 there was $90 million in outstanding borrowings under the
credit facility.

In August 1999, Snyder Communications, Inc. agreed to provide incremental
consideration for the acquisition of Media Syndication Global and PromoTech
Research Associates based on the average trading price of SNC stock, circle.com
stock, and Ventiv Health, Inc. stock for the twenty trading days ending October
15, 1999 (or a such lesser number of days that a public market exists for the
securities up to October 15, 1999). Based on the closing price of the Snyder
Communications stock on August 28, 1999, the amount of such payment would
result in non-cash expense of (1) approximately $10 million, payable in SNC
stock, and (2) approximately $4.3 million, payable in Ventiv Health, Inc.
stock.

F-37
<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-38
<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-39
<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, group equity 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-3 through F-37. Reference should
be made to Note 1 of the accompanying combined financial statements. As
explained in Note 2, certain assets of Snyder Communications, Inc. previously
included in the financial statements of circle.com have been attributed to SNC.

ARTHUR ANDERSEN LLP

Vienna, VA

August 23, 1999

F-40
<PAGE>

SNC
(SNC represents the businesses that comprise Snyder Communications, Inc.'s
direct marketing and advertising agency and also includes SNC's twenty percent
retained interest in circle.com. SNC stock is intended to separately reflect
the performance of SNC)

COMBINED BALANCE SHEET
(in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
----------- -----------------
1999 1998 1997
----------- -------- --------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents.............................. $ 46,399 $ 47,931 $ 71,789
Marketable securities............................. -- 612 1,241
Accounts receivable, net of allowance for
doubtful accounts
of $5,994, $6,629 and $3,806 at June 30, 1999,
December 31, 1998 and 1997, respectively......... 96,903 76,750 67,279
Receivables from pass-through costs............... 96,324 83,164 76,405
Related party receivables......................... 192 190 1,428
Unbilled services................................. 14,477 19,457 13,960
Current portion of deferred tax asset............. 9,795 13,549 8,339
Other current assets.............................. 27,811 11,285 14,053
Net current assets of discontinued operations..... 44,977 24,447 --
-------- -------- --------
Total current assets............................ 336,878 277,385 254,494
-------- -------- --------
Property and equipment, net........................ 71,150 68,785 40,329
Goodwill and other intangible assets, net.......... 153,651 65,863 42,660
Retained interest in circle.com.................... 7,922 1,821 306
Deferred tax asset................................. 86,746 86,637 --
Deposits and other assets.......................... 5,696 5,645 8,198
Net long-term assets of discontinued operations.... 113,794 95,280 33,541
-------- -------- --------
Total assets.................................... $775,837 $601,416 $379,528
======== ======== ========
LIABILITIES AND INVESTMENTS AND ADVANCES
FROM SNYDER COMMUNICATIONS
Current liabilities:
Lines of credit................................... $ 11,809 $ 1,825 $ 9,175
Current maturities of long-term debt.............. 1,007 1,085 2,478
Accrued payroll................................... 17,070 12,337 10,580
Accounts payable.................................. 121,222 113,066 98,325
Accrued expenses.................................. 88,635 79,050 69,415
Client advances................................... 4,550 11,753 12,675
Unearned revenue.................................. 16,117 14,042 16,002
Net current liabilities of discontinued
operations....................................... -- -- 23,170
-------- -------- --------
Total current liabilities....................... 260,410 233,158 241,820
-------- -------- --------
Related party borrowings........................... 8,172 8,924 7,072
Long-term obligations under capital leases......... 1,491 1,743 1,849
Long-term debt, net of current maturities.......... 1,616 1,616 3,935
Other liabilities.................................. 3,885 2,922 2,538
Commitments and contingencies
Redeemable ESOP stock, 93, 88 and 147 shares
outstanding at
June 30, 1999, December 31, 1998 and 1997,
respectively...................................... 2,954 2,960 5,278
Investments and advances from Snyder
Communications.................................... 497,309 350,093 117,036
-------- -------- --------
Total liabilities and investments and advances
from Snyder Communications .................... $775,837 $601,416 $379,528
======== ======== ========
</TABLE>

The accompanying notes are an integral part of this combined balance sheet.

F-41
<PAGE>

COMBINED STATEMENT OF INCOME
(in thousands, except per share amounts)

<TABLE>
<CAPTION>
For the Six
Months Ended June For the Years Ended
30, December 31,
------------------ ----------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
Net revenues................. $287,388 $223,359 $480,289 $397,505 $345,915
Operating expenses:
Cost of services............ 192,183 146,416 314,255 270,268 234,526
Selling, general and
administrative expenses.... 45,851 46,373 92,071 90,555 75,950
Compensation to
stockholders............... -- 382 573 12,422 4,939
ESOP expense................ -- -- -- 5,193 6,439
Acquisition and related
costs...................... 1,382 22,597 38,941 31,389 --
-------- -------- -------- -------- --------
Income (loss) from
operations.................. 47,972 7,591 34,449 (12,322) 24,061
Interest expense, including
amounts to related parties
of $164, $290, $541, $1,491
and $2,103 in the six months
ended June 30, 1999 and 1998
and the years ended December
31, 1998, 1997 and 1996,
respectively................ (696) (1,014) (1,753) (3,178) (5,385)
Investment income............ 1,237 1,614 3,638 2,944 2,371
Income (loss) related to
retained interest in
circle.com.................. (478) (19) -- (26) (48)
-------- -------- -------- -------- --------
Income (loss) from continuing
operations before income
taxes....................... 48,035 8,172 36,334 (12,582) 20,999
Income tax provision ........ 18,416 1,543 14,972 3,940 5,308
-------- -------- -------- -------- --------
Income (loss) from continuing
operations.................. 29,619 6,629 21,362 (16,522) 15,691
Income (loss) from
discontinued operations (net
of income taxes)............ 12,639 2,618 1,446 (10,225) (1,415)
-------- -------- -------- -------- --------
Income (loss) before
extraordinary item.......... 42,258 9,247 22,808 (26,747) 14,276
Extraordinary item, less
applicable income taxes
of $806..................... -- -- -- -- (1,216)
-------- -------- -------- -------- --------
Net income (loss)....... $42,258 $ 9,247 $ 22,808 $(26,747) $ 13,060
======== ======== ======== ======== ========
Pro forma historical net
income (loss) per share (See
Note 1) (unaudited):
Basic and diluted net
income (loss) per share:
Continuing operations..... $0.41 $0.09 $0.29
Discontinued operations... 0.17 0.04 0.02
-------- -------- --------
Total basic and diluted net
income (loss) per share.... $0.58 $0.13 $0.31
======== ======== ========
Pro forma adjusted net income
(loss) per share (unaudited)
(See Note 1 and 4):
Adjusted basic and diluted
net income (loss) per
share:
Continuing operations..... $0.41 $0.05 $0.26
Discontinued operations... 0.17 0.04 0.02
-------- -------- --------
Total basic and diluted net
income (loss) per share.... $0.58 $0.09 $0.28
======== ======== ========
Shares used in computing
net income (loss) per
share...................... 72,688 72,688 72,688
======== ======== ========
</TABLE>

The accompanying notes are an integral part of this combined statement of
income.

F-42
<PAGE>

COMBINED STATEMENT OF CHANGES IN GROUP EQUITY
(in thousands)

<TABLE>
<CAPTION>
Other
Retained Comprehensive
Other Earnings Income (Loss) Total
-------- -------- ------------- --------
<S> <C> <C> <C> <C>
Balance at December 31, 1995......... $ 6,530 $28,987 $ 527 $ 36,044
Net income......................... -- 13,060 -- 13,060
Capital contribution............... 17,668 -- -- 17,668
Foreign currency translation
adjustment........................ -- -- (154) (154)
Unrealized gain/loss on marketable
securities........................ -- -- (111) (111)
-------- ------- ------- --------
Balance at December 31, 1996......... 24,198 42,047 262 66,507
-------- ------- ------- --------
Net income......................... -- (26,747) -- (26,747)
Capital contribution............... 76,894 -- -- 76,894
Foreign currency translation
adjustment........................ -- -- 360 360
Unrealized gain/loss on marketable
securities........................ -- -- 22 22
-------- ------- ------- --------
Balance at December 31, 1997......... 101,092 15,300 644 117,036
-------- ------- ------- --------
Net income......................... -- 22,808 -- 22,808
Capital contribution............... 209,051 -- -- 209,051
Foreign currency translation
adjustment........................ -- -- 1,251 1,251
Unrealized gain/loss on marketable
securities........................ -- -- (53) (53)
-------- ------- ------- --------
Balance at December 31, 1998......... 310,143 38,108 1,842 350,093
-------- ------- ------- --------
Net income (unaudited)............. -- 42,258 -- 42,258
Foreign currency translation
adjustment (unaudited)............ -- -- (4,694) (4,694)
Unrealized gain/loss on marketable
securities (unaudited)............ -- -- (11) (11)
Capital contribution (unaudited)... 109,663 -- -- 109,663
-------- ------- ------- --------
Balance at June 30, 1999
(unaudited)......................... $419,806 $80,366 $(2,863) $497,309
======== ======= ======= ========
</TABLE>

The accompanying notes are an integral part of this combined statement of
changes in group equity.

F-43
<PAGE>

COMBINED STATEMENT OF CASH FLOWS
(in thousands)

<TABLE>
<CAPTION>
For the Six
Months Ended June For the Years Ended
30, 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..... $29,619 $ 6,629 $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............ 11,791 7,742 16,970 13,324 12,786
Loss on repayment of
subordinated debt....... -- -- -- -- 2,021
Noncash charge from
accelerated vesting of
acquired subsidiary
options................. -- 59 1,862 9,097 --
Noncash ESOP expense..... -- -- -- 4,851 5,282
Deferred taxes........... 3,677 (11,735) (13,223) (7,483) (2,957)
Retained interest in
circle.com.............. 478 19 -- 26 48
Gain/loss on disposal of
assets.................. 401 147 600 3,011 1,029
Other noncash amounts.... -- -- (9) 2,114 2,259
Changes in assets and
liabilities:
Accounts receivable,
net..................... (6,829) (14,224) (510) (25,656) (5,069)
Receivables from pass-
through costs........... (13,160) (8,423) (7,924) (11,217) (28,557)
Related party
receivables............. (116) 621 1,238 776 945
Unbilled services........ 7,896 5,601 (4,584) (3,182) (3,199)
Deposits and other
assets.................. (107) 77 2,592 1,046 (532)
Other current assets..... (10,039) 543 640 1,288 (4,140)
Accrued payroll, accounts
payable and
accrued expenses........ 9,127 24,628 13,189 45,821 31,589
Client advances.......... (6,711) (13,592) (2,630) -- --
Unearned revenue......... 928 (1,353) (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.............. 26,955 (3,261) 27,193 19,310 35,594
-------- -------- -------- -------- --------
Cash flows from investing
activities of continuing
operations:
Purchase of subsidiaries,
net of cash acquired...... (18,155) (6,179) (13,862) (22,518) --
Retained interest in
circle.com................ (6,579) (370) (1,515) (178) (202)
Purchase of property and
equipment................. (12,318) (20,404) (34,422) (18,129) (11,184)
Proceeds from sale of
equipment................. -- 7 7 50 74
Net sales of marketable
securities................ 612 339 575 5,807 2,052
Purchase of intangible
assets.................... (3,610) (244) (1,480) (729) (1,974)
Note and net advances to
stockholders of acquired
subsidiaries.............. -- 917 942 1,467 --
Impact from differing
fiscal year ends.......... -- -- -- (446) --
-------- -------- -------- -------- --------
Net cash used in investing
activities of continuing
operations................ (40,050) (25,934) (49,755) (34,676) (11,234)
-------- -------- -------- -------- --------
</TABLE>

The accompanying notes are an integral part of this combined statement of cash
flows.

F-44
<PAGE>

COMBINED STATEMENT OF CASH FLOWS (Continued)
(in thousands)

<TABLE>
<CAPTION>
For the Six
Months Ended June For the Years Ended
30, 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....... (70) (909) (1,740) (29,795) (3,388)
Proceeds from issuance of
subordinated debentures
due to related parties.... -- -- -- 425 294
Repayment of subordinated
debentures due to related
parties................... -- -- -- -- (6,900)
Proceeds (repayment) from
long-term debt............ 449 6,669 (8,723) 5,902 2,450
Proceeds from mandatorily
redeemable preferred
stock..................... -- -- -- -- 1,091
Net borrowings (repayments)
on lines of credit........ 9,984 (7,230) (7,595) (1,306) (2,464)
Payments on capital lease
obligations............... (877) (991) (2,087) (2,102) (1,115)
Investments and advances
from Snyder
Communications............ 12,300 28,161 60,908 41,065 21,518
Impact from differing
fiscal year ends.......... -- -- -- 3,704 --
-------- -------- -------- ------- -------
Net cash provided by
financing activities of
continued operations.... 21,786 25,700 40,763 17,893 11,486
-------- -------- -------- ------- -------
Effect of exchange rate
changes..................... 1,004 92 694 396 1,096
-------- -------- -------- ------- -------
Net increase (decrease) in
cash and equivalents of
continuing operations....... 9,695 (3,403) 18,895 2,923 36,942
Investments and advances (to)
from discontinued
operations.................. (11,227) (14,080) (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...................... $ 46,399 $ 54,306 $ 47,931 $71,789 $68,699
======== ======== ======== ======= =======
Disclosure of supplemental
cash flow information:
Cash paid for interest
including dividends on
mandatorily redeemable
preferred stock........... 810 481 2,681 2,667 4,066
Cash paid for income
taxes..................... 5,025 5,106 13,811 7,726 8,276
Disclosure of noncash
activities:
Equipment purchased under
capital leases............ -- 937 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........... 95,863 50,605 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....... -- 3,484 3,484 -- --
Tax benefit from exercise
of stock options.......... 2,434 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-45
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS

(Information as of June 30, 1999 and for the six months ended June 30, 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, Ventiv
Health, Inc., for every three 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-46
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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, including those applicable to the allocation of
expenses. 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 (within SNC and
circle.com, respectively) 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, except in instances where
they have not been realized by circle.com or SNC.

During the six months ended June 30, 1999, SNC recorded $309,000 of expense
associated with services purchased from circle.com. 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.

Allocation Policies

Certain operations of SNC and circle.com are conducted within the same
subsidiary of Snyder Communications. Therefore, in the case where a subsidiary
of Snyder Communications contains operations of both SNC and circle.com, it is
necessary to allocate certain operating costs as more fully described in the
following sections. In addition, the Board of Snyder Communications has
established allocation policies with respect to taxes and debt as discussed
below.

Specifically Identifiable Operating Expenses. Costs which relate entirely to
the operations of SNC are attributed entirely to SNC. These expenses consist of
costs of personnel who are 100% dedicated to the operations of SNC, all costs
associated with Snyder Communications locations which conduct only the business
of SNC and amounts paid to third parties for work which is specifically
identifiable to the operations of SNC.

F-47
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

All overhead costs which are incurred at locations which conduct only the
business of SNC are also attributed entirely to SNC. These costs include on-
site senior management, human resources, legal, information technology,
accounting and auditing, tax, treasury, strategic planning, and any other
overhead functions which occur at the dedicated locations. In addition, any
costs incurred in locations which conduct the business of both SNC and
circle.com, and which are specifically identifiable to the operations of SNC
are attributed to SNC.

Shared Operating Expenses. Certain company locations and personnel are
involved in conducting the business of both SNC and circle.com. In the case of
employees which are involved in both businesses, the employee costs are
allocated to SNC and circle.com based on estimated time spent by the employees
in the respective businesses. Facility costs fall into two categories: (1)
facility costs for space in which the actual operations of SNC and circle.com
are conducted; and (2) facility costs for space in which the overhead
activities of executive management, human resources, legal, information
technology, accounting and auditing, tax, treasury, strategic planning
functions and any other overhead functions occur. In the case of facility cost
for space in which the actual operations of SNC and circle.com are conducted,
the cost of the space is allocated to SNC and circle.com based on square
footage used by each respective business. In the case of facility costs for
space in which overhead activities occur, the cost of the space is allocated to
SNC and circle.com based on estimated time spent by the overhead employees on
matters relating to SNC and circle.com. Similarly, the other costs associated
with the overhead employees, such as depreciation of computer and office
equipment, employee travel and entertainment and other costs, are allocated to
SNC and circle.com based on estimated time spent by the overhead employees
relating to matters of the respective divisions. As discussed above, overhead
costs at shared locations which are specifically identifiable to the operations
of SNC or circle.com are attributed entirely to the respective business.

Debt and Interest Expense. Snyder Communications incurs debt on behalf of SNC
and circle.com. As of June 30, 1999, $12.3 million of Snyder Communications',
debt which was related to the acquisitions of Tsunami and Natural Intelligence
in June 1999, had been allocated to circle.com and all other debt had been
allocated to SNC. Snyder Communications will attribute each future incurrence
or issuance of external debt and the proceeds of that incurrence or issuance to
SNC, to the extent the proceeds are used for the benefit of SNC, and to
circle.com, to the extent the proceeds are used for the benefit of circle.com.
Interest cost related to the debt attributed to SNC and circle.com will be
allocated to those entities based on the amount of principle attributed to each
business. In the case of pooled debt, such as a revolving credit facility, a
weighted average interest rate will be used in calculating interest expense for
SNC and circle.com. Other than the $12.3 million of debt allocated to
circle.com at June 30, 1999, all cash advances and businesses attributed to
circle.com through June 30, 1999 have been considered a capital contribution to
circle.com by Snyder Communications. After the date on which circle.com stock
is first issued, Snyder Communications will account for all cash transfers from
one group to, or for the account of, the other group as inter-group interest-
bearing revolving credit advances unless the Board determines that a given
transfer or type of transfer should be accounted for as a long-term loan;
Snyder Communications' Board 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, based on the fair market value of circle.com
stock at the time of the additional capital contribution; or the Board
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, based on
the fair market value of circle.com stock at the time of the return of capital.
Any cash transfer accounted for an inter-group revolving credit advance will
bear interest at the rate at which Snyder Communications determines that it
could borrow those funds on a revolving credit basis. Any cash transfer
accounted for as a long-term loan will have an interest rate, amortization,
maturity, and other terms that generally reflect the then prevailing terms on
which Snyder Communications determines that it could borrow those funds. Any
cash transfer from Snyder Communications to circle.com accounted for as a
capital contribution will correspondingly increase circle.com's stockholders'
equity and SNC's retained interest in

F-48
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

circle.com. Any cash transfer from circle.com to Snyder Communications
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,
with respect to the allocation of interest and debt, the historical financial
statements will not be comparable to future periods.

Taxes. Snyder Communications determines its income taxes on a consolidated
basis and allocate consolidated income tax provisions and related tax payments
or refunds between SNC and circle.com based on the taxable income and tax
credits directly attributable to each group. These allocations reflect each
groups' contribution, whether positive or negative, to Snyder Communications'
consolidated taxable income and the consolidated tax liability and tax credit
position.

Unless otherwise noted above, these expense policies have been consistently
applied on a historic basis and will continue to be Snyder Communications'
policy for future periods, unless the Board augments, modifies, or rescinds
these policies. 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. SNC's combined financial statements should be read in
conjunction with Snyder Communications' consolidated financial statements.

Investments and advances from Snyder Communications

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.

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 16). 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 16, relate only to continuing
operations of SNC.

Business

SNC provides direct marketing, advertising and communications services
through its Brann Worldwide, Bounty SCA Worldwide and Arnold Worldwide
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 shares issued
in pooling of interests transactions, 6,545,928 were to companies that operate
through Brann Worldwide, 8,983,714 were to companies that operate through
Bounty SCA Worldwide and 3,489,539 were to companies that operate through
Arnold Worldwide. The Brann Worldwide 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 Worldwide 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-49
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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 six months ended June 30, 1999 (unaudited), and June 30, 1998
(unaudited) of SNC and the Pooled Entities through the dates of their
respective Acquisitions:

<TABLE>
<CAPTION>
For the Six
Months Ended June For the Years Ended
30, December 31,
----------------- ----------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
(unaudited)
(in thousands)
<S> <C> <C> <C> <C> <C>
Revenues:
SNC......................... $287,388 $193,607 $389,651 $159,564 $ 82,840
Pooled Entities............. -- 29,752 90,638 237,941 263,075
-------- -------- -------- -------- --------
$287,388 $223,359 $480,289 $397,505 $345,915
======== ======== ======== ======== ========
Net income (loss) from
continuing operations:
SNC......................... $ 29,619 $ 14,369 $ 31,922 $ 5,881 $ 8,163
Pooled Entities............. -- (7,740) (10,560) (22,403) 7,528
-------- -------- -------- -------- --------
$ 29,619 $ 6,629 $ 21,362 $(16,522) $ 15,691
======== ======== ======== ======== ========
</TABLE>

During 1999, SNC completed several purchase business combinations including
Media Syndication Global ("MSG") (March 30, 1999) and Broadwell Marketing Group
("Broadwell") (May 21, 1999) for total consideration paid of $66.4 million and
$20.6 million, respectively (2,882,250 shares of Snyder Communications common
stock and $9.2 million in cash). These purchase business combinations have
resulted in a preliminary allocation to goodwill of approximately $65.2 million
and $20.0 million, respectively.

The following table presents pro forma financial information as if the 1999
purchases had been consummated at the beginning of each of the periods
presented and all of SNC's operations had been taxed as a C corporation.

<TABLE>
<CAPTION>
For the Six For the Years
Months Ended June Ended December
30, 31,
----------------- -----------------
1999 1998 1998 1997
-------- -------- -------- --------
(unaudited)
(in thousands, except per share
data)
<S> <C> <C> <C> <C>
Pro forma revenues....................... $305,645 $249,211 $544,070 $451,066
Pro forma net income (loss).............. $ 38,324 $ 6,859 $ 21,871 $(28,210)
Pro forma basic and diluted net income
(loss) per share........................ $ 0.53 $ 0.09 $ 0.30
</TABLE>

SNC's other purchase business combinations are immaterial to the combined
financial statements.

Unaudited Interim Financial Statements

The accompanying unaudited combined balance sheet as of June 30, 1999 and the
combined statements of income and cash flows for the six months ended June 30,
1999 and June 30, 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 June 30, 1999 and the results of operations and cash flows for the six
months ended June 30, 1999 and June 30, 1998.

F-50
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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
3); (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. Adjustment of Assets and Liabilities

In August 1999, Snyder Communications finalized the assignment of fixed
assets and debt in making the final determination of SNC's investment in
circle.com prior to the recapitalization. As a result, fixed assets, consisting
primarily of computer equipment, which had previously been attributed to
circle.com has now been attributed to SNC. The accompanying balance sheets at
June 30, 1999 and December 31, 1998 have been restated to reflect this
adjustment. In addition in August 1999, Snyder Communications attributed $12.3
million of borrowings outstanding under its line of credit to circle.com at
June 30, 1999 which had previously been attributed to SNC. The borrowings were
in connection with the June 1999 acquisitions of Tsunami Consulting Group, Inc.
and Natural Intelligence, Inc. The effect of these adjustments was to increase
the assets and net investments and advances from Snyder Communications by
approximately $10.8 million and $1.0 million at June 30, 1999 and December 31,
1998, respectively.

3. Significant Clients:

During the six months ended June 30, 1999, no one client represented more
than 10.0% of SNC's total revenue. 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.

4. 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.

F-51
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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.

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-52
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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 following unaudited
pro forma data also reflects the tax provision had SNC filed a separate tax
return.

F-53
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

The table below presents this pro forma calculation of adjusted net income
(loss):

<TABLE>
<CAPTION>
For the Six Months
Ended June 30, 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........... $ 48,035 $8,172 $36,334 $(12,582) $20,999
Pro forma benefit
(provision) for income
taxes.................. (18,416) (4,063) (17,758) (5,884) (9,084)
--------- -------- ----------- ----------- ----------
Pro forma adjusted
income (loss) from
continuing operations.. 29,619 4,109 18,576 (18,466) 11,915
Discontinued operations,
less applicable pro
forma income taxes of
$(8,563), $(6,795),
$(12,849), $(3,309) and
$(3,713) for the six
months ended June 30,
1999 and 1998 and
December 31, 1998, 1997
and 1996,
respectively........... 12,639 2,618 1,446 (11,601) (3,624)
Extraordinary item, less
applicable income taxes
of $806................ -- -- -- -- (1,216)
--------- -------- ----------- ----------- ----------
Pro forma adjusted net
income (loss).......... $42,258 $6,727 $ 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

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.

F-54
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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 implementation of the Recapitalization Proposal based on the number of
outstanding shares of Snyder Communications common stock on August 26, 1999.
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 $(2.9) million, $1.8 million and $0.6
million as of June 30, 1999, December 31, 1998 and 1997, respectively. The
cumulative unrealized gain on marketable securities was $0, $11,000 and $64,000
as of June 30, 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.

F-55
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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
15.

SNC's Investment in circle.com

In accordance with the amended and restated certificate of incorporation of
Snyder Communications, Inc., the shares of circle.com stock to be issued
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. SNC's retained interest is not represented by
actual shares of circle.com stock. SNC has no voting rights with respect to its
retained interest in circle.com, however the retained interest does represent a
legal interest in circle.com. The percentage of circle.com's equity value
represented by the equity value of this retained interest will change in the
future if actions, such as issuances of additional shares of circle.com stock,
repurchases of shares of circle.com stock, or transfers of cash or other
property between SNC and circle.com, are taken that change the total number of
outstanding shares of circle.com stock. SNC's retained interest in circle.com
represents the percentage of the equity value of circle.com attributable to
SNC. In the event of disposition of at least 80% of the fair value of the
assets attributed to circle.com, SNC will receive credit in an amount
corresponding to its retained interest 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."

Although SNC's retained interest in circle.com has no voting rights, SNC will
be able to exercise significant influence over circle.com as holders of SNC
stock will initially have enough votes to approve any stockholder action where
the SNC stock and the circle.com stock vote as a single class, such as the
election of directors and mergers.

F-56
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

5. 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>

6. 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................................ 53,321 40,728
Furniture and fixtures................................. 12,893 12,532
-------- --------
115,810 76,910
Accumulated depreciation............................... (47,025) (36,581)
-------- --------
$ 68,785 $ 40,329
======== ========
</TABLE>

Depreciation expense totaled $12.4 million, $10.3 million and $9.7 million in
1998, 1997 and 1996, respectively.

F-57
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

7. 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.

8. 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-58
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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-59
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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, maturing January 1, 2000.. $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, maturing August 2000........................... -- 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.

9. 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.

The amended and restated certificate of incorporation of Snyder
Communications, Inc. will permit Snyder Communications to pay dividends on the
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
cannot exceed the

F-60
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

available dividend amount for SNC. The amended and restated certificate of
incorporation will also permit Snyder Communications to pay dividends on
circle.com stock, and to transfer corresponding amounts to SNC in respect of
its retained interest in circle.com, out of the assets legally available for
payment of dividends under Delaware law. However, the total amount paid as
dividends, plus the corresponding amounts transferred to SNC in respect of
SNC's retained interest in circle.com, cannot exceed the available dividend
amount for circle.com. The amended and restated certificate of incorporation
will provide that the available dividend amount for SNC and circle.com,
respectively, at any time is the amount that would then be legally available
for payment of dividends on SNC stock and circle.com stock under Delaware law
as if SNC were a separate Delaware corporation and circle.com were a separate
Delaware corporation. The amount legally available for payment of dividends 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 stock and preferred stock. At the time of any dividend on the
outstanding shares of circle.com stock, SNC will be credited, and circle.com
will be charged, a corresponding amount in respect of SNC's retained interest
in circle.com.

10. 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-61
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

<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.

11. 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

F-62
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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 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 six months ended June 30, 1999, SNC recorded $1.4 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 six months ended June 30, 1999 consists of consulting services and other
costs related to these integration activities. As of June 30, 1999, 36
employees had terminated employment with SNC and $2.5 million had been charged
against the total liability of $4.0 million.

The integration activities recorded in 1998 were recorded in accordance with
Emerging Issues Task Force No. 94-3 "Liability Recognition for Costs to Exit an
Activity (including certain costs incurred in a restructuring)" ("EITF 94-3").
Additional expenses for SNC's integration activities recorded in 1999 represent
additional costs incurred that did not qualify for accrual at December 31, 1998
in accordance with EITF 94-3.

During the six months ended June 30, 1998, SNC recorded $23.0 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.

The following table summarizes the activity in the integration activities
liability account:

<TABLE>
<CAPTION>
Deductions Balance at
Beginning for Amounts End
Balance Additions Paid of Period
--------- --------- ----------- ----------
<S> <C> <C> <C> <C>
Year Ended December 31, 1998........ $ -- 2,625 (305) $2,320
Six Months Ended June 30, 1999...... $2,320 1,383 (2,197) $1,506
</TABLE>

12. 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.

F-63
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

13. 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.

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 $6.4 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.

14. 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

F-64
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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, circle.com stock, or both.
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.

15. 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-65
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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.

16. Discontinued Operations:

Ventiv Health, 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, Ventiv Health, Inc., ("Ventiv"), 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 Ventiv for every three shares of existing Snyder
Communications common stock. Following the Distribution, Ventiv will become an
independent, publicly traded corporation. Accordingly, the results of Ventiv
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 Ventiv operations is presented in the following tables:

F-66
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

Earnings from discontinued Ventiv operations included in the accompanying
combined statement of income are as follows (in thousands):

<TABLE>
<CAPTION>
For the Six Months For the Years Ended
Ended June 30, December 31,
-------------------- ----------------------------
1999 1998 1998 1997 1996
--------- --------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues.................. $ 181,259 $ 151,313 $321,500 $208,967 $144,704
Operating expenses:
Cost of services........ 137,028 109,677 236,047 156,346 104,922
Selling, general and
administrative
expenses............... 21,585 19,929 43,029 32,787 25,960
Compensation to
stockholders........... -- 515 742 15,638 12,340
Recapitalization costs.. -- -- -- 1,889 --
Acquisition and related
costs.................. 1,694 11,356 26,922 8,042 --
--------- --------- -------- -------- --------
Income (loss) from
operations............... 20,952 9,836 14,760 (5,735) 1,482
Interest income (expense),
net...................... 250 (423) (465) (1,049) 105
--------- --------- -------- -------- --------
Income (loss) from
operations before income
taxes.................... 21,202 9,413 14,295 (6,784) 1,587
Income tax provision...... (8,563) (6,795) (12,849) (1,934) (1,504)
--------- --------- -------- -------- --------
Net income (loss)......... $ 12,639 $ 2,618 $ 1,446 $ (8,718) $ 83
========= ========= ======== ======== ========
</TABLE>

The components of net assets (liabilities) of discontinued Ventiv operations
included in the accompanying combined balance sheet are as follows (in
thousands):

<TABLE>
<CAPTION>
June 30, December 31,
1999 1998 1997
----------- -------- -------
(unaudited)
<S> <C> <C> <C>
Cash and equivalents.............................. $ 21,347 $ 25,664 $18,040
Accounts receivable, net.......................... 55,812 43,521 29,331
Unbilled services................................. 25,998 15,212 6,769
Other............................................. 9,871 11,052 9,101
-------- -------- -------
Total current assets............................ 113,028 95,449 63,241
-------- -------- -------
Lines of credit................................... 76 198 22,875
Accounts payable and accrued expenses............. 55,674 60,393 49,274
Unearned revenue.................................. 7,357 8,446 14,125
Other............................................. 4,944 1,965 137
-------- -------- -------
Total current liabilities....................... 68,051 71,002 86,411
-------- -------- -------
Net current assets (liabilities)................ 44,977 24,447 (23,170)
-------- -------- -------
Property and equipment, net....................... 13,455 10,028 4,880
Goodwill and other intangibles.................... 96,103 80,728 26,283
Other............................................. 5,509 7,439 6,543
-------- -------- -------
Total long-term assets.......................... 115,067 98,195 37,706
Total long-term liabilities..................... 1,273 2,915 4,165
-------- -------- -------
Net long-term assets............................ 113,794 95,280 33,541
-------- -------- -------
Total net assets of discontinued operations..... $158,771 $119,727 $10,371
======== ======== =======
</TABLE>

F-67
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

The cash flow provided by (used in) discontinued Ventiv operations was as
follows (in thousands):

<TABLE>
<CAPTION>
For the Six
Months Ended For the Years Ended
June 30, December 31,
---------------- -------------------------
1999 1998 1998 1997 1996
-------- ------ ------- ------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Operating activities of
discontinued operations:
Income (loss) from discontinued
operations....................... $ 12,639 $2,618 $ 1,446 $(8,718) $ 83
Adjustments to reconcile income
(loss) from discontinued
operations to net cash provided
by (used in) operating
activities....................... 4,722 2,916 9,133 (2,308) 325
Net change in assets and
liabilities...................... (28,111) (3,157) (11,800) 9,102 510
-------- ------ ------- ------- -------
Net cash provided by (used)
operating activities............. (10,750) 2,377 (1,221) (1,924) 918
-------- ------ ------- ------- -------
Net cash used in investing
activities....................... (3,144) (4,931) (7,190) (3,576) (1,699)
-------- ------ ------- ------- -------
Investments and advances from
Snyder Communications............ 11,227 14,080 42,753 (167) (7,998)
Other financing activities........ (1,761) (6,152) (26,917) 16,618 (758)
-------- ------ ------- ------- -------
Net cash provided by (used in)
financing activities............. 9,466 7,928 15,836 16,451 (8,756)
-------- ------ ------- ------- -------
Net cash provided by (used in)
discontinued operations before
effect of exchange rate changes
on cash.......................... (4,428) 5,374 7,425 10,951 (9,537)
Effect of exchange rate changes on
cash............................. 111 7 199 (177) 76
-------- ------ ------- ------- -------
Cash flow provided by (used in)
discontinued operations.......... $ (4,317) $5,381 $ 7,624 $10,774 ($9,461)
======== ====== ======= ======= =======
</TABLE>

During the year ended December 31, 1998, Ventiv 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 six months ended June 30, 1999, Ventiv recorded $1.7 million in
nonrecurring acquisition and related costs. This amount is for additional costs
necessary to consolidate and integrate certain of Ventiv's acquired operations
in the U.S. and U.K. under Ventiv's plan initiated in 1998. The charge recorded
in the six months ended June 30, 1999 consists of $1.3 million in severance and
related costs associated with the termination of 23 employees, and $0.4 million
in consulting services and other costs related to these integration activities.
As of June 30, 1999, 149 employees had terminated employment with Ventiv and
$9.1 million had been charged against the total liability of $12.4 million.

F-68
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

contractual payments. In addition, this amount includes a charge of
approximately $4.4 million for costs necessary to consolidate and integrate
certain of Ventiv's acquired operations in the U.S. and the U.K.

The following table summarizes the activity in the Ventiv integration
activities liability account:

<TABLE>
<CAPTION>
Beginning Deductions for Balance at End
Balance Additions Amounts Paid of Period
--------- --------- -------------- --------------
<S> <C> <C> <C> <C>
Year Ended December 31,
1998....................... $ -- 10,654 (2,683) $7,971
Six Months Ended June 30,
1999....................... $7,971 1,696 (6,439) $3,228
</TABLE>

During 1999, Ventiv completed the acquisition of PromoTech Research
Associates, Inc. ("PromoTech") (March 25, 1999). The total consideration paid
was $16.3 million and consisted of 583,431 shares of Snyder common stock. This
purchase business combination has resulted in additional goodwill of
$18.1 million. During 1998, Ventiv completed purchase business combinations,
including CLI Pharma S.A. ("CLI Pharma") (March 25, 1998) and Healthcare
Promotions, LLC ("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, Ventiv completed the acquisition of
Halliday Jones Ltd. ("HJ") (August 28, 1997), 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. This purchase
business combination has resulted in additional goodwill of $19.5 million. The
following table presents pro forma financial information as if the 1999
purchase of PromoTech, 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 Six
Months Ended For the Years Ended
June 30, December 31,
----------------- --------------------
1999 1998 1998 1997
-------- -------- --------- ----------
(unaudited)
(In thousands, except per share data)
<S> <C> <C> <C> <C>
Pro forma revenues.................... $183,186 $163,474 $ 335,628 $ 270,842
Pro forma net income (loss)........... $ 12,955 $ 3,268 $ 2,113 $ (8,759)
Pro forma basic and diluted net income
(loss) per share..................... $ 0.18 $ 0.04 $ 0.03
</TABLE>

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.

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.

F-69
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

17. 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.

18. 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.

19. 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-70
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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.

20. 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-71
<PAGE>

SNC

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

21. 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 $115,518 $125,444 $131,486 $480,289
Gross profit............. 37,667 39,276 43,332 45,759 166,034
Income (loss) from
continuing operations... (4,286) 10,915 14,173 560 21,362
Income (loss) from
continuing operations
per share
(basic and diluted)..... (0.06) 0.15 0.19 0.01 0.29
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)
(a)..................... (0.05) 0.09 (0.05) 0.04 0.02
Net income (loss)........ (8,338) 17,585 10,402 3,159 22,808
Net income (loss) per
share (basic and
diluted)................ (0.11) 0.24 0.14 0.04 0.31
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)
(a)..................... (0.09) 0.14 0.19 0.01 0.26
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 0.14 0.05 0.28
<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
discontinued operation.. (336) 2,183 (11,190) (882) (10,225)
Net income (loss)........ (9,676) 8,654 (18,877) (6,848) (26,747)
Pro forma net income
(loss) from continuing
operations.............. (10,051) 5,378 (7,950) (5,843) (18,466)
Pro forma net income
(loss) from discontinued
operations.............. (634) 1,909 (10,449) (2,427) (11,601)
Pro forma net income
(loss).................. (10,685) 7,287 (18,399) (8,270) (30,067)
</TABLE>

The pro forma amounts include a provision for federal and state income taxes
as if SNC 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.

22. Subsequent Events to June 30, 1999 Financial Statements (unaudited):

In August 1999, Snyder Communications entered into a $195 million, four-year
unsecured revolving credit facility with a bank (the "Lending Bank"). Interest
on amounts borrowed under the credit facility is based on the London Interbank
Offered Rate, the Lending Bank's base rate of interest or the federal funds
rate.

F-72
<PAGE>

Availability under this credit facility is subject to Snyder Communications'
compliance with various financial ratios, operating covenants and other
customary conditions. On August 28, 1999, there was $90 million in outstanding
borrowings under the credit facility.

In August 1999, Snyder Communications agreed to provide incremental
consideration for the acquisition of Media Syndication Global and PromoTech
Research Associates based on the average trading price of SNC stock, circle.com
stock, and Ventiv stock for the twenty trading days ending October 15, 1999 (or
a such lesser number of days that a public market exists for the securities up
to October 15, 1999). Based on the closing price of the Snyder Communications
stock on August 28, 1999, the amount of such payment would result in non-cash
expense of (1) approximately $10 million, payable in SNC stock, and (2)
approximately $4.3 million, payable in Ventiv stock.

F-73
<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-74
<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-75
<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, group equity 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-3 through F-37.
Reference should be made to Note 1 of the accompanying combined financial
statements. As explained in Note 2, certain assets of Snyder Communications,
Inc. previously included in the financial statements of circle.com have been
attributed to SNC.

ARTHUR ANDERSEN LLP

Vienna, VA

August 23, 1999

F-76
<PAGE>

CIRCLE.COM

(Circle.com represents the businesses that comprise Snyder Communications,
Inc.'s Internet professional services business. Circle.com stock is intended to
separately reflect the performance of circle.com)

COMBINED BALANCE SHEET
(in thousands)

<TABLE>
<CAPTION>
June 30, December 31,
----------- --------------
1999 1998 1997
----------- ------- ------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash.............................................. $ 2,193 $ -- $ --
Accounts receivable, net of allowance for doubtful
accounts of $478,
$402 and $88 at June 30, 1999, December 31, 1998
and 1997, respectively........................... 3,972 2,151 1,086
Receivables from pass-through costs............... 2,428 2,851 816
Unbilled services................................. 668 251 --
Deferred tax asset................................ 162 162 35
Other current assets.............................. 308 219 73
------- ------- ------
Total current assets............................ 9,731 5,634 2,010
------- ------- ------
Property and equipment, net......................... 3,247 1,582 922
Goodwill, net....................................... 44,823 6,425 --
Deposits and other assets........................... 452 56 --
------- ------- ------
Total assets.................................... $58,253 $13,697 $2,932
======= ======= ======
LIABILITIES AND INVESTMENTS AND ADVANCES FROM SNYDER
COMMUNICATIONS
Current liabilities:
Accrued payroll................................... $ 2,939 $ 1,086 $ 197
Accounts payable.................................. 1,555 1,475 1,059
Accrued expenses.................................. 1,457 1,497 128
Client advances................................... 349 493 --
Line of credit.................................... 12,292 -- --
------- ------- ------
Total current liabilities....................... $18,592 4,551 1,384
------- ------- ------
Deferred tax liability.............................. 50 40 17
Commitments and contingencies
Investments and advances from Snyder
Communications..................................... 39,611 9,106 1,531
------- ------- ------
Total liabilities and investments and advances
from Snyder Communications..................... $58,253 $13,697 $2,932
======= ======= ======
</TABLE>

The accompanying notes are an integral part of this combined balance sheet.

F-77
<PAGE>

CIRCLE.COM

COMBINED STATEMENT OF OPERATIONS
(in thousands, except per share data)

<TABLE>
<CAPTION>
For the Six
Months Ended For the Years Ended
June 30, December 31,
---------------- -----------------------
1999 1998 1998 1997 1996
------- ------- ------- ------ ------
(unaudited)
<S> <C> <C> <C> <C> <C>
Net revenues....................... $12,347 $ 4,830 $13,514 $5,567 $3,308
Operating expenses:
Professional services............ 7,128 2,420 7,114 3,044 1,960
Office and general............... 7,017 2,291 5,902 3,621 2,176
------- ------- ------- ------ ------
Income (loss) before income taxes.. (1,798) 119 498 (1,098) (828)
Income tax provision (benefit)..... 593 212 500 (968) (588)
------- ------- ------- ------ ------
Net loss........................... $(2,391) $ (93) $ (2) $ (130) $ (240)
======= ======= ======= ====== ======
Pro forma historical net loss per
share (unaudited) (see Note 3):
Basic and diluted net loss per
share........................... $ (0.11) $ -- $ --
======= ======= =======
Pro forma adjusted net income
(loss) per share (unaudited) (see
Note 3):
Basic and diluted net income
(loss) per share................ $ (0.11) $ -- $ 0.01
======= ======= =======
Pro forma shares used in computing
net income (loss) per share....... 18,172 18,172 18,172
======= ======= =======
</TABLE>

The accompanying notes are an integral part of this combined statement of
operations.

F-78
<PAGE>

CIRCLE.COM
(Circle.com represents the businesses that comprise Snyder Communications,
Inc.'s internet professional service business. Circle.com stock is intended to
separately reflect the performance of circle.com)

COMBINED STATEMENT OF CHANGES IN GROUP EQUITY
(in thousands)

<TABLE>
<CAPTION>
Other
Retained Comprehensive
Other Earnings Income (Loss) Total
------- -------- ------------- -------
<S> <C> <C> <C> <C>
Balance at December 31, 1995........... $ -- $ -- $-- $ --
Net loss ............................ -- (240) -- (240)
Capital contribution................. 1,010 -- -- 1,010
------- ------- ---- -------
Balance at December 31, 1996........... 1,010 (240) -- 770
------- ------- ---- -------
Net loss............................... -- (130) -- (130)
Foreign currency translation
adjustment.......................... -- -- (4) (4)
Capital contribution................. 895 -- -- 895
------- ------- ---- -------
Balance at December 31, 1997........... 1,905 (370) (4) 1,531
------- ------- ---- -------
Net loss............................... -- (2) -- (2)
Foreign currency translation
adjustment.......................... -- -- (9) (9)
Capital contribution................. 7,586 -- -- 7,586
------- ------- ---- -------
Balance at December 31, 1998........... 9,491 (372) (13) 9,106
------- ------- ---- -------
Net loss (unaudited)................... -- (2,391) -- (2,391)
Foreign currency translation
adjustment (unaudited).............. -- -- 5 5
Capital contribution (unaudited)..... 32,891 -- -- 32,891
------- ------- ---- -------
Balance at June 30, 1999 (unaudited)... $42,382 $(2,763) $ (8) $39,611
======= ======= ==== =======
</TABLE>

The accompanying notes are an integral part of this combined statement of
changes in group equity.

F-79
<PAGE>

CIRCLE.COM

COMBINED STATEMENT OF CASH FLOWS
(in thousands)

<TABLE>
<CAPTION>
For the
Six Months For the Years
Ended June 30, Ended December 31,
----------------- ----------------------
1999 1998 1998 1997 1996
-------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
(unaudited)
Cash flows from operating
activities:
Net loss........................... $ (2,391) $ (93) $ (2) $ (130) $ (240)
Adjustments to reconcile net loss
to net cash
used in operating activities:
Depreciation and amortization.... 1,130 291 557 193 112
Deferred taxes................... 10 18 (104) (18) --
Changes in assets and liabilities:
Accounts receivable, net......... (1,083) (1,198) (923) (642) (444)
Receivables from pass-through
costs........................... 423 (277) (870) (375) (441)
Unbilled services................ (417) -- (229) -- --
Other current assets............. (20) (16) 48 (17) (56)
Deposits and other assets........ (390) -- (56) -- --
Accrued payroll, accounts payable
and accrued expenses............ (2,145) 292 388 838 546
Client advances.................. (144) -- 493 -- --
Unearned revenue................. -- -- -- (125) 125
-------- ------- ------ ------ ------
Net cash used in operating
activities.................... (5,027) (983) (698) (276) (398)
-------- ------- ------ ------ ------
Cash flows from investing
activities:
Purchase of property and
equipment......................... (1,784) (838) (1,232) (606) (612)
Purchase of subsidiaries........... (12,292) -- (636) -- --
Cash at acquired subsidiary........ 1,193 -- 90 -- --
-------- ------- ------ ------ ------
Net cash used in investing
activities.................... (12,883) (838) (1,778) (606) (612)
-------- ------- ------ ------ ------
Cash flows from financing
activities:
Investment and advances from
Snyder Communications, net........ 7,806 1,830 2,491 895 1,010
Net borrowings (repayments) of
line of credit.................... 12,292 -- -- -- --
-------- ------- ------ ------ ------
Net cash provided by financing
activities.................... 20,098 1,830 2,491 895 1,010
-------- ------- ------ ------ ------
Effect of exchange rate changes..... 5 (9) (15) (13) --
Net increase (decrease) in cash and
equivalents........................ 2,193 -- -- -- --
Cash and equivalents, beginning of
period............................. -- -- -- -- --
-------- ------- ------ ------ ------
Cash and equivalents, end of
period............................. $ 2,193 $ -- $ -- $ -- $ --
======== ======= ====== ====== ======
Disclosure of noncash activities:
Businesses acquired with Snyder
Communications common stock....... $25,085 $ -- $5,095 $ -- $ --
</TABLE>

The accompanying notes are an integral part of this combined statement of cash
flows.

F-80
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS

(Information as of June 30, 1999 and for the six months ended June 30, 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 including those applicable to the allocation of
expenses. 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 (within SNC and
circle.com, respectively) 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, except in instances
where they have not been realized by SNC.

F-81
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

During the six months ended June 30, 1999 circle.com recorded $309,000 of
revenue for services provided to SNC. There were no intercompany transactions
in 1998, 1997 and 1996.

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.

Allocation Policies

Certain operations of circle.com and SNC are conducted within the same
subsidiary of Snyder Communications. Therefore, in the case where a subsidiary
of Snyder Communications contains operations of both circle.com and SNC, it is
necessary to allocate certain operating costs as more fully described in the
following sections. In addition, the Board of Snyder Communications has
established allocation policies with respect to taxes and debt as discussed
below.

Specifically Identifiable Operating Expenses. Costs which relate entirely to
the operations of circle.com are attributed entirely to circle.com. These
expenses consist of costs of personnel who are 100% dedicated to the operations
of circle.com, all costs associated with Snyder Communications locations which
conduct only the business of circle.com, and amounts paid to third parties for
work which is specifically identifiable to the operations of circle.com. All
overhead costs which are incurred at locations which conduct only the business
of circle.com are also attributed entirely to circle.com. These costs include
on-site senior management, human resources, legal, information technology,
accounting and auditing, tax, treasury, strategic planning, and any other
overhead functions which occur at the dedicated locations. In addition, any
costs incurred in locations which conduct the business of both circle.com and
SNC, and which are specifically identifiable to the operations of circle.com
are attributed to circle.com.

Shared Operating Expenses. Certain company locations and personnel are
involved in conducting the business of both circle.com and SNC. In the case of
employees which are involved in both businesses, the employee costs are
allocated to circle.com and SNC based on estimated time spent by the employees
in the respective businesses. Facility costs fall into two categories: (1)
facility costs for space in which the actual operations of circle.com and SNC
are conducted; and (2) facility costs for space in which the overhead
activities of executive management, human resources, legal, information
technology, accounting and auditing, tax, treasury, strategic planning
functions and any other overhead functions occur. In the case of facility cost
for space in which the actual operations of circle.com and SNC are conducted,
the cost of the space is allocated to circle.com and SNC based on square
footage used by each respective business. In the case of facility costs for
space in which overhead activities occur, the cost of the space is allocated to
circle.com and SNC based on estimated time spent by the overhead employees on
matters relating to circle.com and SNC, respectively.

F-82
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

Similarly, the other costs associated with the overhead employees, such as
depreciation of computer and office equipment, employee travel and
entertainment and other costs, are allocated to circle.com and SNC based on
estimated time spent by the overhead employees relating to matters of the
respective divisions. The totals for the allocated portion of circle.com
operating expenses were $2.8 million and $1.0 million for the six months ended
June 30, 1999 and 1998, respectively, and $3.1 million, $1.8 million, and $1.1
million for the years ended December 31, 1998, 1997, and 1996, respectively. As
discussed above, overhead costs at shared locations which are specifically
identifiable to the operations of circle.com or SNC are attributed entirely to
the respective business.

Debt and Interest Expense. Snyder Communications incurs debt on behalf of
circle.com and SNC. As of June 30, 1999, $12.3 million of Snyder
Communications' debt which was related to the acquisitions of Tsunami
Consulting Group, Inc. and Natural Intelligence Inc. had been allocated to
circle.com and all other debt had been allocated to SNC. Snyder Communications
will attribute each future incurrence or issuance of external debt and the
proceeds of that incurrence or issuance to SNC, to the extent the proceeds are
used for the benefit of SNC, and to circle.com, to the extent the proceeds are
used for the benefit of circle.com. Interest cost related to the debt
attributed to SNC and circle.com will be allocated to those entities based on
the amount of principle attributed to each business. In the case of pooled
debt, such as a revolving credit facility, a weighted average interest rate
will be used in calculating interest expense for circle.com and SNC. Other than
the $12.3 million of debt allocated to circle.com at June 30, 1999, all cash
advances and businesses attributed to circle.com through June 30, 1999 have
been considered a capital contribution to circle.com by Snyder Communications.
After the date on which circle.com stock is first issued, Snyder Communications
will account for all cash transfers from one group to, or for the account of,
the other group as inter-group interest-bearing revolving credit advances
unless the Board determines that a given transfer or type of transfer should be
accounted for as a long-term loan; Snyder Communications' Board 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, based on the
fair market value of circle.com stock at the time of the additional capital
contribution; or the Board 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, based on the fair market value of circle.com stock at the time
of the return of capital. Any cash transfer accounted for an inter-group
revolving credit advance will bear interest at the rate at which Snyder
Communications determines that it could borrow those funds on a revolving
credit basis. Any cash transfer accounted for as a long-term loan will have an
interest rate, amortization, maturity, and other terms that generally reflect
the then prevailing terms on which Snyder Communications determines that it
could borrow those funds. Any cash transfers from Snyder Communications to
circle.com accounted for as a capital contribution will correspondingly
increase circle.com's stockholders' equity and SNC's retained interest in
circle.com. Any cash transfer from circle.com to Snyder Communications
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,
with respect to the allocation of interest and debt, the historical financial
statements will not be comparable to future periods.

Taxes. Snyder Communications will determine its income taxes on a
consolidated basis and allocate consolidated income tax provisions and related
tax payments or refunds between circle.com and SNC based on the taxable income
and tax credits directly attributable to each group. These allocations will
reflect each groups' contribution, whether positive or negative, to Snyder
Communications' consolidated taxable income and the consolidated tax liability
and tax credit position.

Unless otherwise noted above, these expense policies have been consistently
applied on a historical basis and will continue to be the company's policy for
future periods, unless the Board of Snyder Communications augments, modifies,
or rescinds these policies. In the opinion of management, the methods for
allocating these

F-83
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

costs are reasonable. 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. Circle.com's combined financial statements
should be read in conjunction with Snyder Communications' consolidated
financial statements.

Investments and advances from Snyder Communications

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
Snyder Communications) and the effect of businesses acquired by Snyder
Communications in purchase transactions and contributed to circle.com.

Pooling of Interests Transactions

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 six months ended June 30,
1999 (unaudited) and June 30, 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 Six Months
Ended June 30, For the Years Ended December 31,
-------------------- -----------------------------------
1999 1998 1998 1997 1996
--------- --------- ----------- ---------- ----------
(unaudited)
(in thousands)
<S> <C> <C> <C> <C> <C>
Revenues:
circle.com......... $12,347 $ 4,353 $ 13,037 $ 1,219 $ --
pooled entities.... -- 477 477 4,348 3,308
--------- -------- ----------- ---------- ----------
$12,347 $ 4,830 $ 13,514 $ 5,567 $ 3,308
========= ======== =========== ========== ==========
Net Income (loss):
circle.com......... $ (2,391) $ 193 $ 284 $ (308) $ --
pooled entities.... -- (286) (286) 178 (240)
--------- -------- ----------- ---------- ----------
$ (2,391) $ (93) $ (2) $ (130) $ (240)
========= ======== =========== ========== ==========
</TABLE>

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

F-84
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

circle.com; (iii) the ability to recruit and retain qualified personnel; (iv)
reliance on significant clients (See Note 3); (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 $29.0 million and $7.4 million,
respectively (844,499 shares of Snyder Communications common stock and
$12.3 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 $30.3 million and $7.7 million, respectively. Each
of these acquired businesses constitute a part of circle.com's business. In
August of 1999, Snyder Communications entered into a definitive agreement to
acquire Interactive Bureau for total consideration of approximately $28.8
million ($8.8 million in cash and $20.0 million in circle.com stock). The
acquisition is expected to close immediately after the Recapitalization.

The following table presents pro forma financial information as if the 1998
and 1999 purchases and the pending acquisition of Interactive Bureau 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 Six Months Ended December
Ended June 30, 31,
-------------------- ----------------
1999 1998 1998 1997
--------- --------- ------- -------
(unaudited) (unaudited)
(in thousands)
--------------------------------------
<S> <C> <C> <C> <C>
Pro forma revenues.................... $ 20,990 $ 12,451 $29,943 $18,877
Pro forma net loss.................... $ (9,819) $ (4,240) $(8,284) $(7,626)
Pro forma basic and diluted net loss
per share............................ $ (0.54) $ (0.23) $ (0.46)
</TABLE>

Unaudited Interim Financial Statements

The accompanying unaudited combined balance sheet as of June 30, 1999 and the
combined statements of operations and cash flows for the six months ended June
30, 1999 and June 30, 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 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 June 30, 1999 and the
results of operations and cash flows for the six months ended June 30, 1999 and
June 30, 1998.

F-85
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

2. Adjustment of Assets and Liabilities

In August 1999, Snyder Communications finalized the assignment of fixed
assets and debt in making the final determination of SNC's investment in
circle.com prior to the recapitalization. As a result, fixed assets, consisting
primarily of computer equipment, which had previously been attributed to
circle.com has now been attributed to SNC. The accompanying balance sheets at
June 30, 1999 and December 31, 1998 have been restated to reflect this
adjustment. In addition in August 1999, Snyder Communications attributed $12.3
million of borrowings outstanding under its line of credit to circle.com at
June 30, 1999, which had previously been attributed to SNC. The borrowings were
in connection with the June 1999 acquisitions of Tsunami Consulting Group, Inc.
and Natural Intelligence, Inc. The effect of these adjustments was to decrease
the assets and net investments and advances from Snyder Communications by
approximately $13.4 million and $1.3 million at June 30, 1999 and December 31,
1998, respectively.

3. 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.

F-86
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

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.

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 states 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%, 32.6% 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 Six Months For the Years Ended
Ended June 30, December 31,
------------------------------------------
1999 1998 1998 1997 1996
---------- -------------- ------- -----
(unaudited) (unaudited)
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Historical income (loss)
before income taxes........ $ (1,798) $ 119 $ 498 $(1,098) $(828)
Pro forma (provision)
benefit for income taxes... (593) (90) (375) 357 283
---------- ------- ----- ------- -----
Pro forma adjusted net
income (loss).............. $(2,391) $ 29 $ 123 $ (741) $(545)
========== ======= ===== ======= =====
</TABLE>

F-87
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

The table below presents the calculation of pro forma net income (loss) had
the income tax provision (benefit) been calculated as if circle.com had been
taxable as a "C" corporation on a separate return basis:

<TABLE>
<CAPTION>
For the Six Months For the Years Ended
Ended June 30, December 31,
-------------------------------------------
1999 1998 1998 1997 1996
---------- -------------- -------- -----
(unaudited) (unaudited)
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Historical income (loss)
before income taxes....... $ (1,798) $ 119 $ 498 $ (1,098) $(828)
Pro forma (provision)
benefit for income taxes.. (593) (90) (375) -- --
---------- ------- ----- -------- -----
Pro forma adjusted net
income (loss)............. $ (2,391) $ 29 $ 123 $ (1,098) $(828)
========== ======= ===== ======== =====
</TABLE>

The circle.com income tax provision as calculated on a separate return basis
reflects no benefit for net operating loss carryforwards due to the uncertainty
associated with realizing those benefits on a separate return basis.

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.

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.

F-88
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

Circle.com had clients in the years ended December 31, 1998, 1997, and 1996
which accounted for a significant percentage of revenue as follows:

During the six months ended June 30, 1999, no one client represented greater
than 10.0% of circle.com's total 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 August 26, 1999.
The outstanding shares of circle.com do not include any shares attributable to
SNC's twenty percent retained interest. The net loss for circle.com was $2.4
million and $93,000 for the six months ended June 30, 1999 and 1998,
respectively, and $2,000 for the year ended December 31, 1998. Of these net
losses, 80% is applicable to the shareholders of circle.com and 20% is
allocable to the retained interest of SNC. EPS has been computed using the net
loss applicable to the shareholders of circle.com of $1.9 million and $74,000
for the six months ended June 30, 1999 and the six months ended June 30, 1998,
respectively, and $2,000 for the year ended December 31, 1998. 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.

During 1998, Snyder Communications adopted Statement of Financial 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 11.

F-89
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

4. 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................................ $ 1,932 $ 981
Leasehold improvements................................. 275 235
Furniture and fixtures................................. 106 11
--------- ---------
2,313 1,227
--------- ---------
Accumulated depreciation............................... (731) (305)
--------- ---------
$ 1,582 $ 922
========= =========
</TABLE>

Depreciation expense totaled $0.4 million, $0.2 million, and $0.1 million in
1998, 1997 and 1996, respectively.

5. 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.

6. 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-90
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 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.

7. 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-91
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 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.

The amended and restated certificate of incorporation of Snyder
Communications will permit Snyder Communications to pay dividends on the 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 cannot
exceed the available dividend amount for SNC. The amended and restated
certificate of incorporation will also permit dividends to be paid on
circle.com stock, and transfer corresponding amounts to SNC in respect of its
retained interest in circle.com, out of the assets legally available for
payment of dividends under Delaware law. However, the total amount paid as
dividends, plus the corresponding amounts transferred to SNC in respect of
SNC's retained interest in circle.com, cannot exceed the available dividend
amount for circle.com. The amended and restated certificate of incorporation
will provide that the available dividend amount for SNC and circle.com,
respectively, at any time is the amount that would then be legally available
for payment of dividends of SNC stock and circle.com stock under Delaware law
as if SNC were a separate Delaware corporation and circle.com stock were a
separate Delaware corporation. The amount legally available for payment of
dividends 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 stock and preferred stock. At the time of any dividend on the
outstanding shares of circle.com stock, SNC will be credited, and circle.com
will be charged, a corresponding amount in respect of SNC's retained interest
in circle.com.

8. 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, circle.com stock, or
both. 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.

9. 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.

F-92
<PAGE>

CIRCLE.COM

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
1998 is unaudited)

10. 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.

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................................................................ $ 1,765
2000................................................................ 1,896
2001................................................................ 1,946
2002................................................................ 2,027
2003................................................................ 2,091
Thereafter.......................................................... 8,420
-------
Total minimum lease payments........................................ $18,145
=======
</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.

11. 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-93
<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

Vienna, VA
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
Beginning of Deductions for Translation Balance at
Year Additions Amounts Paid 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 August 23, 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

Vienna, VA

August 23, 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
Beginning of Deductions for Translation Balance at
Year Additions Amounts Paid 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 August 23, 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

Vienna, VA

August 23, 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 "Snyder
Communications, Inc.--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 Snyder Communications, Inc.--"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 Value of one share of 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
Value of one share of SNC Stock over the same period.

(B) 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 quarterly as of the first day of each quarter (and remaining
fixed for the remainder of that quarter) by the ratio of (i) the average
Market Value of one share of 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 Value
of one share of 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 (i) 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 and (ii) 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.

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 (i) 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 and (ii) 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.

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
.75 of a "Liquidation Unit" and each share of circle.com Stock is hereby
attributed one "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 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

(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

A-4
<PAGE>

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 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 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) equal to 110% of the
ratio of the average Market Value of one share of circle.com Stock 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 110% of the ratio of the average Market Value
of one share of circle.com Stock to one share of SNC 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.

A-5
<PAGE>

(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 Premium multiplied by 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 a
share of SNC Stock for the same period. The "Premium" shall initially be
125% 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 115%.

(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
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 a share of SNC 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 115% of
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
Conversion Date (ii) the average market price of a share of circle.com
Stock over the same period.

(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

A-6
<PAGE>

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 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 a
share of circle.com 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 to such Disposition, (3) the number of shares of
circle.com Stock into or for which Convertible Securities

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are then convertible, exchangeable or exercisable and the conversion,
exchange or exercise price thereof and (4) any adjustments to 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. For purposes of this calculation, the
number of outstanding shares of circle.com Stock are assumed to include 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 SNC were a separate Delaware
corporation. For purposes of this calculation, SNC's assets are deemed to
include 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 the
stockholders of the Corporation in accordance with the provisions of Sections
242 and 245 of the Delaware General Corporation Law, has been executed by
, its , this day of 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 "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).

2.7 "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 Compensation Committee chooses to
grant an 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.

2.8 "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.

2.9 "Corporation" means Snyder Communications, Inc., a Delaware corporation,
or any successor thereto.

2.10 "Disability" means total disability as defined in Section 22(e)(3) of
the Code.

2.11 "Exchange Act" means the Securities Exchange Act of 1934, as amended.

2.12 "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

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<PAGE>

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
Compensation 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.

2.13 "Option" means an option awarded under Section 7 to purchase Shares.

2.14 "Option Exercise Period" means the period from the Option Grant Date to
the date on which an Option expires.

2.15 "Option Grant Date" means the date upon which the Compensation Committee
grants an Option to an Optionee.

2.16 "Optionee" means an employee, Director or Consultant of the Corporation
or any Subsidiary to whom an Option has been granted.

2.17 "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.

2.18 "Plan" means this Snyder Communications, Inc. Second Amended and
Restated 1996 Stock Incentive Plan, as it may be amended and restated from time
to time.

2.19 "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 Compensation Committee.

2.20 "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.

2.21 "Restricted Stock Agreement" means a written agreement between a
Participant and the Corporation evidencing an award of Restricted Stock.

2.22 "Restricted Stock Award Date" means the date on which the Compensation
Committee awards Restricted Shares to the Participant.

2.23 "Restrictions" means the restrictions and conditions imposed on
Restricted Stock awarded to a Participant, as determined by the Compensation
Committee, which must be satisfied in order for the Restricted Stock award to
vest, in whole or in part, in the Participant.

2.24 "Shares," except as specifically provided in Section 6, means shares of
either SNC Stock or circle.com Stock, as the case may be.

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2.25 "SNC Stock" means shares of the SNC stock, par value $0.001 per share,
of the Corporation.

2.26 "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.

2.27 "Stock Appreciation Rights Agreement" means a written agreement between
a Participant and the Corporation evidencing an award of Stock Appreciation
Rights.

2.28 "Stock Option Agreement" means a written agreement between a
Participant and the Corporation evidencing an award of an Option.

2.29 "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.

2.30 "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 the
Compensation Committee of the Board.

3.2 Authority of Compensation Committee. The appropriate Compensation
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 grant
Awards consisting of Options and Stock Appreciation Rights, to persons
below the rank of Senior Vice President.

The foregoing determinations shall be made in accordance with the
Compensation 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 Compensation Committee. A majority of the Compensation
Committee shall constitute a quorum at any meeting of the Committee, and all
determinations of the Compensation Committee shall be made by a majority of
its members. Any action which the Compensation 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 Compensation
Committee shall report all actions taken by it to the Board.

B-3
<PAGE>

3.4 Delegation. The Compensation 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 Compensation Committee Determinations. No members of the
Compensation 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 Compensation 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 Option,
Restricted Stock, a Stock Appreciation Right, or a combination thereof, at the
discretion of the Compensation Committee.

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
Compensation 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 Compensation Committee may determine.

6. Shares Subject to Plan.

(a) ( ) Shares of SNC Stock, increased (except as provided
below) on the date the Board authorizes the issuance of additional Shares
of SNC Stock by ( ) percent of the number of such additional
Shares of SNC Stock which are authorized to be issued; and

(b) ( ) Shares of circle.com Stock, increased
(except as provided below) on the date the Board authorizes the issuance of
additional Shares of circle.com Stock by ( ) percent of the number of
such additional Shares of circle.com Stock which are authorized to be
issued;

provided, in each case, however, that any such increase shall be made only
to the extent the Corporation has authorized and unreserved Shares of SNC
Stock or circle.com Stock, as the case may be, for such purposes. Such
increases shall occur on the date of each such authorization of the
issuance of additional Shares of SNC Stock and/or circle.com Stock, as the
case may be, by the Board, except for authorized issuances of Shares issued
with respect to Awards under the Plan or relating to changes in
capitalization for which an adjustment to the Shares available under the
Plan is required by Section 15.

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 under this Plan to any one
Participant during any calendar year 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. The preceding
sentence shall apply only for purposes of determining the aggregate number of
Shares of each of SNC Stock and circle.com Stock which may be

B-4
<PAGE>

issued upon the exercise of Options or Stock Appreciation Rights and the Award
of Restricted Stock but shall not apply for purposes of determining the
aggregate number of Shares of each of SNC Stock and circle.com Stock which may
be issued upon the exercise of Options or Stock Appreciation Rights and the
Award of Restricted Stock under this Plan to any one Participant during any
calendar year.

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 (the
"Option Price") may not be less than 100% 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.

(b) Vesting of Options. Except as provided in this Section 7.1, Options
granted shall vest in accordance with the terms provided by the
Compensation Committee in the Option Agreement. The Compensation 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.

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 Compensation
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 Compensation
Committee, the Compensation 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 Option shall terminate no later than ten
years after the Option Grant Date. 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.

B-5
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(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
Compensation 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.

(h) Forfeiture of Options for Misconduct. If the Compensation 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 Compensation 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 Compensation
Committee.

(i) Transferability of Options. Section 11 to the contrary
notwithstanding, if the Compensation Committee so provides in the Option
Agreement, an 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.

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 Compensation 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;

(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; or

(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.

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.

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<PAGE>

9. Performance-Based Awards of Restricted Stock.

Certain Awards of Restricted Stock granted under the Plan may be granted in a
manner that the Awards qualify for the performance-based compensation exemption
of Section 162(m) of the Code ("Performance-Based Awards"). As determined by
the Compensation Committee in its sole discretion, either the granting or
vesting of such Performance-Based Awards shall be based on achievement of
hurdle rates and/or growth rates in one or more business criteria that apply to
the individual participant or one or more business units or the Corporation as
a whole. The business criteria shall be as follows, individually or in
combination: (i) net earnings; (ii) earnings per share; (iii) net sales growth;
(iv) market share; (v) net operating profit; (vi) expense targets; (vii)
working capital targets relating to accounts receivable; (viii) operating
margin; (ix) return on equity; (x) return on assets; (xi) planning accuracy (as
measured by comparing planned results to actual results); (xii) market price
per share; and (xiii) total return to stockholders. In addition, Performance-
Based Awards may include comparisons to the performance of other companies,
such performance to be measured by one or more of the foregoing business
criteria. With respect to Performance-Based Awards, (i) the Compensation
Committee shall establish in writing (x) the performance goals applicable to a
given period, and such performance goals shall state, in terms of an objective
formula or standard, the method for computing the amount of compensation
payable to the Participant if such performance goals are obtained and (y) the
individual employees or class of employees to which such performance goals
apply no later than 90 days after the commencement of such period (but in no
event after 25% of such period has elapsed) and (ii) no Performance-Based
Awards shall be payable to or vest with respect to, as the case may be, any
Participant for a given period until the Compensation Committee certifies in
writing that the objective performance goals (and any other material terms)
applicable to such period have been satisfied. With respect to Awards intended
to qualify as Performance-Based Awards, after establishment of a performance
goal, the Compensation Committee shall not revise such performance goal or
increase the amount of compensation payable thereunder (as determined in
accordance with Section 162(m) of the Code) upon the attainment of such
performance goal. Notwithstanding the preceding sentence, the Compensation
Committee may reduce or eliminate the number of Shares granted or the number of
Shares upon the attainment of such performance goal.

10. Stock Appreciation Rights.

10.1 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.

10.2 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.

(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 Compensation 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 10.2(b), the Fair Market Value of the Shares shall be determined as
of the date of exercise of the SAR.

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<PAGE>

(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.

11. Non-Transferability of Awards.

Except as may be provided by the Committee in accordance with Section 7.1(i),
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 by will or by the
applicable laws of descent and distribution. Except as may be provided by the
Compensation Committee in accordance with Section 7.1(i), 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.

12. 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 Compensation 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.

13. 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 Compensation
Committee shall determine otherwise.

14. 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 total number of Shares which may be issued pursuant to the Plan or
the maximum number of shares subject to Awards that may be granted to any
individual under the Plan, change the designation of the classes of employees,
Directors or Consultants eligible to receive Options, remove the administration
of the Plan from the Compensation Committee or modify the business criteria for
Performance-Based Awards. 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.

15. 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.

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<PAGE>

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 Compensation Committee may accelerate the
exercise 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 Compensation 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 Compensation Committee,
whose determination in that respect shall be final, binding and conclusive.

Except as hereinbefore expressly provided in this Section 15, 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 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.

16. 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.

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<PAGE>

17. Effective Date.

The Plan as amended shall be effective on , 1999, subject to the approval
of the Plan within 12 months of such date by a majority of the voting shares
represented and entitled to vote. Stockholders must reapprove the Plan at the
first meeting of stockholders held in 2004 in order to permit Performance-Based
Awards under Section 9 of the Plan to be granted after that date.

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

C-1
<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.

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<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 shares of SNC stock and 200 shares of circle.com stock.
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 the
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 under rules and procedures to be adopted by the
Administrative Committee. 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 pursuant to rules and procedures to be adopted by
the Administrative Committee. 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 SEPTEMBER 1, 1999

--FOR INFORMATION ONLY--

INFORMATION STATEMENT
[LOGO APPEARS HERE]

VENTIV HEALTH, INC.

Common Stock
(par value $0.001 per share)

Consider carefully the risk factors beginning on page 9 of this information
statement.

Stockholder approval of the distribution of Ventiv common stock is not required.
We are not asking you for a proxy and we request that you do not send us a
proxy. Also, you are not required to make any payment for the shares of Ventiv
common stock.

This information statement is not an offer to sell, or a solicitation of an
offer to buy, any securities of Snyder or Ventiv.

We have prepared this information statement to provide you
with information regarding the pro rata distribution to Snyder
Communications, Inc. common stockholders of all of the shares of
common stock of Ventiv Health, Inc., which will conduct the
business currently conducted by Snyder's healthcare services
group.

The shares of Ventiv common stock will be distributed on the
effective date of the distribution, which is September , 1999,
to holders of Snyder common stock at the close of business on
the record date for the distribution, which is September , 1999.

If you are a Snyder common stockholder at the close of
business on the record date, you will receive one share of
Ventiv common stock for every three shares of Snyder common
stock you hold. Certificates for the shares will be mailed on or
about September , 1999. You will receive a check for the cash
equivalent of any fractional shares you otherwise would have
received in the distribution.

If you have any questions regarding the distribution, you may
call American Stock Transfer and Trust Company at (800) 937-
5449, the distribution agent, or Snyder's investor relations
contact at (301) 468-1010.

No public market currently exists for the Ventiv common stock. However, we
are seeking to list the Ventiv 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

"VTIV"

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved the Ventiv 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 September
, 1999.

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Item Page
- ---- ----
<S> <C>
SUMMARY................................................................... 1
Ventiv Health, Inc. .................................................... 1
Relationship between Ventiv and Snyder After the Distribution........... 2
Management.............................................................. 2
Key Terms of the Distribution........................................... 3
Information Regarding the Distribution and Ventiv....................... 4
Reasons for Furnishing This Information Statement....................... 5
Forward-Looking Statements.............................................. 5
Summary Historical Financial Data....................................... 6
Summary Unaudited Pro Forma Financial Data.............................. 7
RISK FACTORS.............................................................. 9
QUESTIONS AND ANSWERS ABOUT VENTIV AND THE DISTRIBUTION................... 13
THE DISTRIBUTION.......................................................... 15
Background and Reasons for the Distribution............................. 15
Manner of Effecting the Distribution.................................... 15
Material Federal Income Tax Consequences................................ 16
Market for Ventiv Common Stock.......................................... 17
Dividend Policy......................................................... 18
Distribution Conditions and Termination................................. 18
RELATIONSHIP AND AGREEMENTS BETWEEN VENTIV AND SNYDER AFTER THE
DISTRIBUTION............................................................. 19
General................................................................. 19
Distribution Agreement.................................................. 19
Tax Sharing Agreement................................................... 20
Interim Services Agreement.............................................. 20
BUSINESS.................................................................. 21
Overview................................................................ 21
Trends Affecting Growth................................................. 21
The Ventiv Approach..................................................... 23
The Ventiv Health, Inc. Support Continuum............................... 24
Ventiv's Operating Groups............................................... 25
Competitive Advantages.................................................. 31
Clients................................................................. 33
Competition............................................................. 33
Employees............................................................... 34
Government Regulation................................................... 34
Properties.............................................................. 35
Legal Proceedings....................................................... 35
SELECTED FINANCIAL DATA................................................... 36
UNAUDITED PRO FORMA FINANCIAL DATA........................................ 37
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS............................................................... 39
Overview................................................................ 39
Results of Operations................................................... 39
Liquidity and Capital Resources......................................... 45
Year 2000............................................................... 45
Effect of Inflation..................................................... 46
Quantitative and Qualitative Disclosures About Market Risk.............. 46
</TABLE>

i
<PAGE>

<TABLE>
<CAPTION>
Item Page
- ---- ----
<S> <C>
MANAGEMENT............................................................... 47
Directors.............................................................. 47
Directors' Meetings and Committees..................................... 48
Compensation of Directors.............................................. 48
Executive Officers..................................................... 48
EXECUTIVE COMPENSATION................................................... 50
Historical Compensation................................................ 50
Ventiv Compensation and Benefit Plans.................................. 51
1999 Stock Incentive Plan.............................................. 51
Treatment of Snyder Options Following the Distribution................. 56
Employment Agreements.................................................. 57
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT........... 59
DESCRIPTION OF CAPITAL STOCK............................................. 61
Authorized Capital Stock............................................... 61
Ventiv Common Stock.................................................... 61
Preferred Stock........................................................ 61
No Preemptive Rights................................................... 61
Transfer Agent and Registrar........................................... 61
ANTI-TAKEOVER EFFECTS OF PROVISIONS OF DELAWARE LAW, VENTIV'S CERTIFICATE
OF INCORPORATION AND BY-LAWS............................................ 62
Delaware Law........................................................... 62
Certificate of Incorporation and By-Laws............................... 62
LIMITATION ON LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS.... 63
Limitation on Liability of Directors................................... 63
Indemnification and Insurance.......................................... 63
ADDITIONAL INFORMATION................................................... 64
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 Ventiv
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 Ventiv, you should carefully review this entire document.
References in this information statement to "Ventiv" mean Ventiv Health, Inc.
and its subsidiaries. References in this information statement to "Snyder" mean
Snyder Communications, Inc. and its subsidiaries and affiliates.

Ventiv Health, Inc.

After the distribution, Ventiv will continue to be one of the leading
providers based on revenues of marketing and sales services for the
pharmaceutical and life sciences industries. Our salesforce ranks first or
second in size among outside providers in the United States, Germany, France
and the United Kingdom, which constitute four of the top six worldwide
pharmaceutical markets. Our clients include 18 of the 20 largest pharmaceutical
companies based on revenues, which clients accounted for approximately 65.9% of
our total revenues for the six months ended June 30, 1999. 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 Ventiv Health, Inc., a newly
formed Delaware corporation. The shares of common stock of Ventiv will be
distributed to Snyder stockholders on a pro rata basis on the effective date of
the distribution, September , 1999.

The distribution of the shares of Ventiv common stock will be effective on
the distribution date, September , 1999. No vote of Snyder's stockholders is
required to approve the distribution of the Ventiv common stock, as this
distribution does not constitute a disposition of all or substantially all of
the assets of Snyder for purposes of Delaware law.

Snyder's management believes that separating Ventiv into a separate,
strategically focused public company will provide the following benefits:

. Tie Compensation to Performance. Ventiv'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. The primary component of the compensation packages for
Eran Broshy, the Chief Executive Officer of Ventiv, and the other
members of Ventiv's management team will be Ventiv common stock.

. Develop Focused Business Strategies. Snyder's management believes that
the spin-off will enhance Ventiv's ability to focus its business
strategies on the unique characteristics of its healthcare marketing
business and enable Ventiv to compete more effectively in the
pharmaceutical and life sciences industries.

. Improve Access to Capital. As a separate company, with its own
management and structure, Ventiv will no longer compete with Snyder's
other businesses for Snyder's available capital and will be able to
directly access the debt and equity markets for the funding necessary to
execute its business plans and strategies.

1
<PAGE>

. Increase Visibility to the Capital Markets. Following the distribution,
the financial markets will be able to focus on the individual businesses
and strengths of Ventiv and Snyder.

Snyder's management has identified the following detriments entailed in
separating Ventiv into a separate public company:

. Inability to Rely on Snyder. Ventiv's has no operating history as an
independent company and has relied on Snyder for financial,
administrative and managerial support. Other than the administrative
services to be provided by Snyder pursuant to the Interim Services
Agreement to be entered into as part of the distribution, Ventiv will be
unable to access Snyder's available capital or rely on Snyder for
support in the conduct of Ventiv's business following the distribution.

. Less Diversified Business. Ventiv will be dependent on the life sciences
industries and its significant pharmaceutical company clients and will
no longer be part of a larger, more diversified marketing company.

. Absence of Trading History for Ventiv Common Stock. There is no existing
market for the Ventiv common stock and no assurance as to the trading
prices for the Ventiv common stock before or after the distribution
date.

See "Risk Factors" beginning on page 9 for a more complete discussion of the
risks that you should consider in respect of your ownership of Ventiv common
stock.

Relationship between Ventiv and Snyder After the Distribution

After the distribution, Snyder will focus its efforts on its worldwide direct
marketing, advertising, communications and Internet professional services
business. Snyder will retain responsibility for liabilities and obligations
relating to its continuing business, and for general corporate liabilities that
are not directly related to the healthcare services business.

After the distribution, Snyder will no longer own any Ventiv common stock,
although Daniel M. Snyder and Michele D. Snyder will beneficially own
approximately 12.9% and 4.6%, respectively, of Ventiv. However, Snyder and
Ventiv will enter into certain agreements to define their ongoing relationship
after the distribution. These agreements also will allocate responsibility for
obligations arising prior to the distribution and for certain obligations that
might arise in the future. See "Relationship and Agreements Between Ventiv and
Snyder After the Distribution" beginning on page 19.

Management

Eran Broshy will be the Chief Executive Officer of Ventiv. Mr. Broshy has
extensive experience in the pharmaceutical and life sciences industries,
working for 14 years at the Boston Consulting Group and serving as the firm's
North American healthcare practice leader from 1991 until 1998. Most recently,
Mr. Broshy was 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 Gregory S. Patrick, Robert Brown, Ph.D., R.
Jeremy Stone, M.D., Allan Avery and William Pollock. See "Management--Executive
Officers" beginning on page 48.

The Ventiv Board of Directors will consist of seven persons, including both
Daniel M. Snyder and Michele D. Snyder, who will serve as non-executive Co-
Chairpersons of the Board of Directors of Ventiv, and Eran Broshy, Fred
Drasner, A. Clayton Perfall, Mortimer Zuckerman and at least one additional
independent director that will be designated prior to or promptly following the
distribution. See "Management--Directors" beginning on page 47.

2
<PAGE>

Key Terms of the Distribution

No Stockholder Action No action is required by Snyder stockholders to
Required receive Ventiv common stock in the distribution.

You do not need to surrender Snyder common stock to
receive Ventiv 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 (September ,
1999), you will be entitled to receive Ventiv common
stock in the distribution.

Distribution Ratio You will receive one share of Ventiv common stock for
every three shares of Snyder common stock you own as
of the close of business on September , 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 15.

Shares To Be All of the Ventiv common stock will be distributed in
Distributed the distribution. Based on the 72,688,315 shares of
Snyder common stock outstanding as of August 26,
1999, 24,229,438 shares of Ventiv common stock will
be distributed.

Mailing Date The distribution agent will mail Ventiv common stock
certificates to Snyder stockholders on or about
September , 1999, which you should receive shortly
thereafter.

3
<PAGE>

Information Regarding the Distribution and Ventiv

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 Ventiv common stock to:

Ventiv Health, 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 Ventiv common
stock will be:

American Stock Transfer and Trust Company
Shareholder Division
40 Wall Street, 46th Floor
New York, NY 10005
(800) 937-5449

4
<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 Ventiv 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 Ventiv. Snyder and
Ventiv believe that the information presented herein is accurate as of the date
hereof. Changes will occur after the date hereof, and neither Snyder nor Ventiv
will update the information except to the extent required in the normal course
of their respective public disclosure practices and as required pursuant to the
federal securities laws.

Forward-Looking Statements

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

. ""Summary;"

. ""Risk Factors;"

. ""Questions and Answers About Ventiv and the Distribution;"

. ""The Distribution;"

. ""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 "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.

5
<PAGE>

Summary Historical Financial Data

The following table summarizes certain historical financial data with respect
to Ventiv and is qualified in its entirety by reference to, and should be read
in conjunction with, the Ventiv 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 Ventiv. Historical financial
information may not be indicative of Ventiv's future performance as an
independent company. 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 Ventiv had been taxed similarly to a C corporation for all
periods presented. 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 Six Months For the Years Ended
Ended June 30, 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................... $ 181,259 $ 151,313 $321,500 $ 208,967 $144,704
========= ========= ======== ========= ========
Net income (loss).......... $ 12,639 $ 2,618 $ 1,446 $ (8,718) $ 83
========= ========= ======== ========= ========
Unaudited:
Pro forma historical basic
and diluted net income
(loss) per share (2)...... $ 0.52 $ 0.11 $ 0.06
========= ========= ========
Pro forma adjusted net in-
come
(loss) ................... $ 12,639 $ 2,618 $ 1,446 $ (10,700) $ (2,729)
========= ========= ======== ========= ========
Pro forma adjusted basic
and diluted net income
(loss) per share (2)...... $ 0.52 $ 0.11 $ 0.06
========= ========= ========
Shares used in computing
net income (loss) per
share (2)................. 24,229 24,229 24,229
========= ========= ========
Balance Sheet Data:
Total assets............... $228,095 $193,644 $ 100,947 $ 51,180
========= ======== ========= ========
Long-term debt............. $ 1,270 $ 1,473 $ 4,154 $ 2,634
========= ======== ========= ========
Total investments and
advances from Snyder
Communications, Inc.(1) .. $158,771 $119,727 $ 10,371 $ 4,697
========= ======== ========= ========
</TABLE>
- --------
(1) Investments and advances from Snyder represent the net cash transferred to
Ventiv from Snyder and businesses acquired by Snyder and contributed to
Ventiv. No amounts are expected to be repaid to Snyder.

(2) For all periods presented, net income per share has been computed using
shares of Ventiv that will be issued upon the distribution based on the
number of outstanding shares of Snyder common stock on August 26, 1999.
Basic and diluted net income per share are the same for all periods
presented, as there will be no options to purchase Ventiv common stock
granted until the distribution.

6
<PAGE>

Summary Unaudited Pro Forma Financial Data

The following unaudited pro forma financial data reflect the distribution as
if it had occurred on January 1, 1998 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 Ventiv operated as an
independent entity, Ventiv's effective income tax rate subsequent to the
distribution and the effects of significant acquisitions as if they had been
consummated on January 1, 1998. These data do not necessarily reflect the
results of operations or financial position of Ventiv that would have resulted
had the distribution actually been consummated as of such date. These data also
exclude the estimated $16.0 million of transaction expenses associated with the
spin-off which will be borne by Snyder. These data are not indicative of the
future results of operations or future financial position of Ventiv.

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME (LOSS)
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(in thousands)
<TABLE>
<CAPTION>
Purchased
Ventiv Subsidiary Pro Forma Pro Forma
Historical Historical (5) Entries Ventiv
---------- -------------- --------- ---------
<S> <C> <C> <C> <C>
Revenues....................... $181,259 $1,927 $ -- $183,186
Operating expenses:
Cost of services........... 137,028 976 -- 138,004
Selling, general, and
administrative expenses... 21,585 493 413 (1) 22,491
Restricted stock
compensation.............. -- -- 475 (4) 475
Acquisition and related
costs..................... 1,694 -- -- 1,694
-------- ------ ----- --------
Income from operations......... 20,952 458 (888) 20,522
Interest expense............... (123) -- -- (123)
Investment income.............. 373 8 -- 381
-------- ------ ----- --------
Income before income taxes..... 21,202 466 (888) 20,780
Income tax (provision) benefit. (8,563) (178) 360 (2) (8,381)
-------- ------ ----- --------
Net income..................... $ 12,639 $ 288 $(528) $ 12,399
======== ====== ===== ========
</TABLE>

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 1998
(in thousands)
<TABLE>
<CAPTION>
Purchased Pro Pro
Ventiv Subsidiaries Forma Forma
Historical Historical (3) Entries Ventiv
---------- -------------- ------- --------
<S> <C> <C> <C> <C>
Net revenues................... $321,500 $14,128 $ -- $335,628
Operating expenses:
Cost of services........... 236,047 9,360 -- 245,407
Selling, general, and
administrative expenses... 43,029 3,516 825 (1) 47,370
Restricted stock
compensation.............. -- -- 2,650 (4) 2,650
Compensation to
stockholders.............. 742 -- -- 742
Acquisition and related
costs..................... 26,922 -- -- 26,922
-------- ------- ------- --------
Income from operations......... 14,760 1,252 (3,475) 12,537
Interest expense............... (2,315) -- -- (2,315)
Investment income.............. 1,850 49 -- 1,899
-------- ------- ------- --------
Income (loss) before income
taxes......................... 14,295 1,301 (3,475) 12,121
Income tax (provision) benefit. (12,849) (658) 1,410 (2) (12,097)
-------- ------- ------- --------
Net income (loss).............. $ 1,446 $ 643 $(2,065) $ 24
======== ======= ======= ========
</TABLE>

7
<PAGE>

- --------

(1) Reflects additional costs associated with employment agreements executed
for the three newly created executive positions of Chief Executive
Officer, Chief Financial Officer and Vice President of Business
Development and Strategy of Ventiv Health, Inc. These employment
agreements provide for aggregate base compensation of $825,000 per year.
In addition to these employment agreements, the Company expects to hire
additional employees, enter into additional agreements for office space,
professional services, advertising and other general and administrative
services associated with operations as a stand-alone public company. The
Company estimates that these additional expenses will be approximately
$5.8 million per year, however, there can be no assurance that actual
costs will not exceed these estimates. These estimated costs are not
reflected in the accompanying pro forma financial data.
(2) Reflects the effect of the estimated increase in Ventiv'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, CLI Pharma S.A. and PromoTech Research Associates, Inc. from January
1, 1998 through their respective dates of acquisition.

(4) Reflects compensation expense of $2.7 million and $0.5 million for the
year ended December 31, 1998 and the six months ended June 30, 1999,
respectively, associated with restricted stock grants to be made to
certain officers and directors of Ventiv immediately following the
distribution pursuant to agreements entered into as part of the
distribution.
(5) Reflects the historical results of operations of PromoTech Research
Associates, Inc. from January 1, 1998 through its date of acquisition.

8
<PAGE>

RISK FACTORS

You should carefully consider the following risk factors to which Ventiv has
been subject in the past, and which currently and in the future may have an
impact on Ventiv. 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 Expenditures by Companies in the Life Sciences Industries

Our revenues are highly dependent on promotional, marketing and sales
expenditures by companies in the life sciences industries, including the
pharmaceutical, medical device, diagnostics and biotechnology 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 life sciences industries toward consolidation, by
merger or otherwise, may result in a reduction in the use of contract sales
providers.

Dependence on Trend Toward Outsourcing in the Pharmaceutical and Life Sciences
Industries

Our business and growth depend in large part on the progression of the trend
in the pharmaceutical and life sciences industries toward the 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, outsourced marketing services, such as those that we provide, would have a
material adverse effect on our business.

Reliance on Significant Pharmaceutical Clients

Our ten largest clients, based on revenues for the six months ended June 30,
1999, listed alphabetically, are Abbott Laboratories, AstraZeneca, Bristol-
Myers Squibb, Eli Lilly, Endo Pharmaceuticals, Glaxo Wellcome, Johnson &
Johnson, Merck, Novartis, Pfizer and Searle (Monsanto). These clients accounted
for approximately 59% of our revenues for the six months ended June 30, 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
contracts that our clients may cancel, typically on 60 to 90 days notice. 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.

Risk Associated with Our International Operations and Expansion in the United
Kingdom and Continental Europe

Ventiv has a number of operations in the United Kingdom and continental
Europe. The following are the material risks inherent in conducting our
international operations:

. difficulties in complying with a variety of foreign laws,
. unexpected changes in regulatory requirements,
. difficulties in staffing and managing foreign operations,
. potentially adverse tax consequences,
. foreign currency risk, and
. the risk of economic downturn in non-U.S. locations where Ventiv does
business.

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.

9
<PAGE>

Also, approximately 45% of our revenues in 1998 were generated from
operations outside of the United States. Approximately 38% of our foreign-
generated revenues were denominated in British pounds and 44% in French francs.
The U.S. dollar value of our foreign-generated 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.

Management of Our Growth

Ventiv 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 and Specially Trained Employees

Many aspects of our business are very labor intensive and the turnover rate
of employees in our industry generally is high. Our turnover rate ranges from
10% to 35% annually depending on the geographic location, whether the employees
are full-time or part-time, and whether the employees are hired on a project
basis, with the higher turnover occurring among our part-time, special project
employees. Our part-time and special project employees account for
approximately 30% of our workforce. We believe our turnover rate is not
materially higher than comparable contract service organizations in our
industry. An increase in the turnover rate among our employees would increase
our recruiting and training costs and decrease our 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 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 of Handling and Distribution of Pharmaceutical Samples

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. These laws regulate the distribution of drug
samples by mandating storage, handling and record-keeping requirements for drug
samples and by banning the purchase or sale of drug samples. In certain
jurisdictions, including the United Kingdom and France, pharmaceutical sales
representatives are subject to examination and licensing requirements under
local law and industry guidelines. Our physician education services are subject
to a variety of foreign, federal and state regulations relating to both the
education of

10
<PAGE>

medical professionals and the marketing and sales of pharmaceuticals. In
addition, certain ethical guidelines promulgated by the American Medical
Association govern the receipt by physicians of gifts in connection with the
marketing of healthcare products. These guidelines govern the honoraria and
other items of value which AMA physicians may receive, directly or indirectly,
from pharmaceutical companies. Ventiv follows similar guidelines in effect in
other countries where it provides services. Any changes in these regulations
and guidelines or their application could have a material adverse effect on our
business. Failure to comply with these requirements could result in the
imposition of fines, loss of licenses and other penalties and could have a
material adverse effect on Ventiv.

Government Regulation of Pharmaceutical and Life Sciences Industries

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 Ventiv.

Influence of Daniel M. Snyder and Michele D. Snyder

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 12.9% and 4.6%, respectively, of the outstanding shares of
Ventiv 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 Ventiv.

Year 2000

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 Ventiv as a whole.

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. 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. Of the 45% of our 1998 revenue
derived from outside the U.S., 38% of such foreign-generated revenues was
denominated in British pounds, 44% in French francs, and the remaining 18%
primarily in German marks and Dutch guilders. All of the foregoing currencies,
with the exception of the British pound, have been linked to the Euro since
January 1, 1999. Any negative economic developments which occur in the combined
EU economy and the possible devaluation of the Euro could have a material
negative impact on our business.

11
<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 modify business systems to recognize the Euro as a
functional currency:

- In France and Germany, we have addressed the need to adapt computer
and other business systems and equipment to accommodate Euro-
denominated transactions by upgrading all computer systems in 1999
to Euro-compliant systems;

- In the U.K., we are in the process of implementing new Euro-
compliant systems which we expect to complete prior to November
1999, 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

Ventiv 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. We are currently
in discussions with proposed lenders to enter into a secured credit facility
which will provide financing of $75 million to $100 million in September 1999.
However, Ventiv currently has no established financing sources or other
external source of funds and there is no assurance a credit facility will be
obtained. After the distribution, we will maintain our own banking
relationships, employ our own senior executives and perform our own
administrative functions (except that for an interim period Snyder will
continue to provide certain support services to Ventiv 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, Ventiv'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 Ventiv After the Distribution."

Tax Consequences of the Distribution to Snyder and Snyder's Stockholders

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 Ventiv
common stock distributed to its stockholders over Snyder's basis in the Ventiv
common stock, and each U.S. holder 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 Ventiv common stock received. See "The
Distribution--Material Federal Income Tax Consequences."

Absence of Trading History for Ventiv Common Stock

There is no existing market for the Ventiv common stock. Although Ventiv 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 Ventiv common stock is fully distributed and
orderly markets develop, the trading prices for such securities may fluctuate.
The lack of orderly markets for the Ventiv common stock will result in less
liquidity for the Ventiv common stock immediately following the distribution.
Prices for the Ventiv 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 Ventiv and its

12
<PAGE>

business, the results of Ventiv, the dividend policies of Ventiv and general
economic and market conditions. The Ventiv 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 Ventiv common stock after the distribution
could adversely affect the market price of Ventiv common stock. See "The
Distribution--Market for Ventiv Common Stock."

Absence of Dividends on Ventiv Common Stock

We do not anticipate paying cash dividends in the foreseeable future. See
"The Distribution--Dividend Policy."

QUESTIONS AND ANSWERS ABOUT VENTIV AND THE DISTRIBUTION

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, September
, 1999, shares of Ventiv common stock will be
mailed to you or credited to your brokerage account
on September , 1999. You do not need to mail in
Snyder stock certificates to receive Ventiv common
stock certificates. You will not receive new Snyder
common stock certificates.

Explain the distribution One share of Ventiv common stock will be
ratio. distributed for every three shares of Snyder common
stock you own on the record date. For example, if
you own 150 shares of Snyder common stock as of the
close of business on the record date, you will
receive 50 shares of Ventiv 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
States federal income to the effect that the distribution should be tax-
tax purposes? free to Snyder and to Snyder's U.S. stockholders
except with respect to cash you are paid in lieu of
fractional shares of Ventiv common stock. See "Risk
Factors--Tax Consequences of the Distribution to
Snyder and Snyder's Stockholders" beginning on page
12 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 Ventiv does not anticipate paying any cash
dividends on the Ventiv dividends on its common stock in the foreseeable
common stock? future. See "The Distribution--Dividend Policy"
beginning on page 18.

Where will my shares of At present, there is no public market for Ventiv
Ventiv common stock common stock. Ventiv is seeking to list its common
trade? stock on the Nasdaq National Market. If the shares
are accepted for listing, we expect that a "when-
issued" trading market for Ventiv common stock will
develop on or shortly before the record date, and
that "regular-way" trading will begin on
, 1999. See "The Distribution--Market
for Ventiv Common Stock" beginning on page 17.

Will the distribution After the distribution, the trading price of Snyder
affect the trading price common stock may be lower than the trading price
of my Snyder common immediately prior to the distribution. Moreover,
stock? until the market has evaluated the operations of
Snyder

13
<PAGE>

without the business of Ventiv, the trading price
of Snyder common stock may fluctuate. The combined
trading prices of Snyder common stock and Ventiv
common stock may not equal the trading price of
Snyder common stock prior to the distribution. See
"The Distribution--Market for Ventiv 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
of the distribution? Ventiv common stock on or shortly before the record
date and to continue through the effective date of
the distribution, which is September , 1999. A
"when-issued" listing can be identified by the
letters "wi" next to the Ventiv common stock on the
Nasdaq National Market. If "when-issued" trading
develops, you may buy or sell Ventiv 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 Ventiv common stock (and possibly
Snyder common stock) after the distribution. There
may be differences between the combined value of
"when-issued" Ventiv 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 September ,
1999 and ending on the distribution date be
accompanied by due bills representing the Ventiv
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 Options granted under Snyder's Stock Incentive Plan
existing employee stock to Ventiv employees will terminate on the
options to purchase distribution date if unvested, and to the extent
Snyder common stock? vested will terminate in accordance with the terms
of Snyder's Stock Incentive Plan unless exercised
within 90 days following the distribution date.
Ventiv intends to grant options under its 1999
Stock Incentive Plan to Ventiv employees whose
existing Snyder stock options are terminated as a
consequence of the distribution. The new Ventiv
options granted on the distribution date
immediately following the distribution will have
exercise prices equal to the closing price of the
Ventiv common stock on the distribution date and
will be exercisable for a number of shares of
Ventiv common stock determined by Ventiv's Board of
Directors or the compensation committee thereof
based on the seniority and performance of the
individual employee, in accordance with the terms
of Ventiv's 1999 Stock Incentive Plan. A percentage
of the new Ventiv options granted to the Ventiv
employees equal to the vested percentage of the
existing Snyder options held by each such employee
will vest immediately upon the grant of the new
Ventiv options. See "Executive Compensation--1999
Stock Incentive Plan" beginning on page 51 and
"Executive Compensation--Treatment of Snyder
Options Following the Distribution" beginning on
page 56.

14
<PAGE>

THE DISTRIBUTION

Background and Reasons for the Distribution

Snyder is a leading international provider 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 services business a
better platform to compete in the pharmaceutical and life sciences markets.

Snyder's management believes that separating Snyder and Ventiv into two
separate, strategically focused public companies will provide the following
benefits:

. Tie Compensation to Performance. Following the distribution, Ventiv 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 Ventiv, and the other members of
Ventiv's management team will be Ventiv common stock. Ventiv intends to
establish certain employee benefit plans for the benefit of Ventiv
employees, including a stock incentive plan. These equity incentives are
expected to help Ventiv attract and retain talented and effective
management and to motivate employees throughout the organization. In
addition, Ventiv intends to grant options under its 1999 Stock Incentive
Plan to Ventiv employees whose existing Snyder stock options are
terminated as a consequence of the distribution. Ventiv'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 Ventiv need to be
distinguished from those pursued by Snyder in its core markets. As a
separate company, Ventiv will have more flexibility in responding to the
needs of its client base. This focus will enable Ventiv to compete more
effectively in the pharmaceutical and life sciences industries.

. Improve Access to Capital. The distribution will give Ventiv direct
access to capital markets. As a group within Snyder, Ventiv 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, Ventiv will no longer compete with Snyder's other
businesses for Snyder's available capital and will be able to directly
access the debt and equity markets for the 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 Ventiv 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 Ventiv. See "Relationship and
Agreements Between Snyder and Ventiv After the Distribution--Distribution
Agreement."

On the distribution date, Snyder will effect the distribution by delivering
all of the outstanding shares of Ventiv common stock to American Stock Transfer
and Trust Company, as distribution agent, for distribution to the 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 Ventiv common stock for
every three shares of Snyder common stock.

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The actual number of shares of Ventiv 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 Ventiv 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 Ventiv common stock will be mailed to
Snyder stockholders on or about September , 1999.

Certificates or script representing fractional shares of Ventiv 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, on or within two business days after the distribution
date, aggregate and sell all such fractional interests on the Nasdaq National
Market at then prevailing market prices and within five business days following
the distribution date 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.

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 the tax-free spin-off provisons of the Internal Revenue
Code of 1986 (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 Ventiv 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 urged 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 the tax-free spin-off provisons 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
Ventiv common stock;

(ii) A Snyder stockholder's aggregate tax basis for his or her Snyder
common stock on which Ventiv common stock is distributed and the
Ventiv common stock received by such stockholder in the distribution
(including any fractional shares of Ventiv 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 Ventiv common
stock received in the distribution (including any fractional shares of
Ventiv common stock deemed received) in proportion to the fair market
value of both the Snyder common stock and Ventiv common stock on the
distribution date;

(iii) A Snyder stockholder's holding period for the Ventiv common stock
received in the distribution (including any fractional shares of
Ventiv common stock to which such stockholder may be entitled)

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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 Ventiv 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 Ventiv 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.

There are numerous requirements that must be satisfied in order for the
distribution to be accorded tax-free treatment under the Code. Due to the
inherently factual and subjective nature of certain of these requirements,
Arthur Andersen LLP is unable to render an unqualified opinion as to the tax-
free nature of the distribution. Arthur Andersen LLP has advised Snyder that
if the distribution does not qualify as a tax-free spin-off under the tax-free
spin-off provisions of the Code, Snyder would be required to recognize gain
equal to the excess of the fair market value of the Ventiv common stock
distributed to its stockholders over Snyder's basis in the Ventiv common
stock. Snyder has agreed to indemnify Ventiv for any tax liability imposed on
Ventiv 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 Ventiv 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 the tax-free spin-off provisions 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 Ventiv
common stock received.

Current United States Treasury regulations require each Snyder stockholder
who receives Ventiv 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 under the tax-free spin-off provisions of the Code to
the distribution. Snyder will provide the appropriate information to each
stockholder of record as of the record date (September , 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 Ventiv Common Stock

There is no existing market for Ventiv common stock. Ventiv 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 Ventiv 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 Ventiv 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 Ventiv
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 Ventiv's business, the impact of
the factors referred to in "Risk Factors," investor perceptions of Ventiv and
its business, the results of Ventiv, the dividend policy of Ventiv, and
general economic and market conditions. It is anticipated that Ventiv common
stock will be traded on the Nasdaq National Market under the symbol "VTIV."

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The transfer agent and registrar for the Ventiv common stock will be American
Stock Transfer and Trust Company.

Shares of Ventiv common stock distributed to Snyder stockholders in the
distribution will be freely transferable under the Securities Act, except for
shares of Ventiv common stock received by persons who may be deemed to be
affiliates of Ventiv. Persons who may be deemed to be affiliates of Ventiv
after the distribution generally include individuals or entities that control,
are controlled by, or are under common control with Ventiv and may include
certain officers and directors, or principal stockholders, of Ventiv. After
Ventiv 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 Ventiv 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

Ventiv 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 or pay
cash dividends will be made by Ventiv's Board of Directors. The actual amount
and timing of dividends, if any, will depend on Ventiv's financial condition,
results of operations, business prospects, capital requirements and such other
matters as Ventiv'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, September , 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 Ventiv 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 Ventiv 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 Ventiv required to constitute
Ventiv 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 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 VENTIV
AND SNYDER AFTER THE DISTRIBUTION

General

Immediately prior to the distribution, Ventiv will be wholly owned by Snyder
and, until the distribution, the results of operations of the assets and
entities that will constitute Ventiv will be included in Snyder's consolidated
financial statements. After the distribution, Snyder will not have any
ownership interest in Ventiv, which will be an independent, publicly traded
company. See "Security Ownership of Certain Beneficial Owners and Management."
After the distribution, Ventiv will not have any ownership interest in Snyder.

Immediately prior to the distribution, Snyder and Ventiv 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 being entered into between Snyder and Ventiv while Ventiv is
still a wholly owned subsidiary of Snyder, and certain terms of these
agreements are not the same as would have been obtained through negotiations
with an unaffiliated third party. 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 Ventiv 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 Ventiv 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 Ventiv

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 Ventiv. The Distribution Agreement further
provides that Ventiv 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 Ventiv, the assets constituting the healthcare services business are
owned by Ventiv 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 Ventiv and its subsidiaries
(including liabilities arising in respect of the transfer of such assets
and entities to Ventiv), as well as the registration statement, to
Ventiv; and

. the assets and entities that will constitute Snyder and its subsidiaries
to Snyder.

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Tax Sharing Agreement

Snyder and Ventiv will enter into a tax sharing agreement, which will
allocate tax liabilities between Snyder and Ventiv 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. Snyder will be responsible for and will indemnify Ventiv
against all tax liabilities relating to the assets and entities that will
constitute Snyder and its subsidiaries, and Ventiv will be responsible for and
will indemnify Snyder against all tax liabilities relating to the assets and
entities that will constitute Ventiv and its subsidiaries.

In addition, Ventiv and Snyder will indemnify the other against all tax
liabilities incurred by Snyder or any of its subsidiaries, on the one hand, or
Ventiv 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 Ventiv against all
tax liabilities imposed on Ventiv (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 Ventiv or any of its subsidiaries.

Interim Services Agreement

Snyder will enter into an Interim Services Agreement with Ventiv. Pursuant to
this agreement, Snyder will continue to furnish various administrative services
to Ventiv until Ventiv develops sufficient capabilities to perform these
duties. These services will consist of administrative services including
financial accounting and reporting, budgeting and analysis, income tax
preparation and employee benefit plan administration. Ventiv estimates that it
would have paid approximately $3.0 million to Snyder for these services during
fiscal 1998. This agreement will terminate after a period of twelve (12)
months, but may be terminated earlier by either party as to specific services.
Ventiv will pay fees to Snyder for services provided in amounts based on
Snyder's costs incurred in providing such services.

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
Ventiv who terminated employment on or prior to the distribution date. Benefit
plans established by Ventiv generally will recognize past service with Snyder.

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BUSINESS

Overview

Ventiv is a leading global provider of marketing and sales services for the
life sciences industry based on revenues. 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 Ventiv'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 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 Ventiv, according to Datamonitor, an independent market research firm.
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

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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 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. Estimates cited by
Hambrecht & Quist in an industry research report 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.

Technological Breakthroughs. Pharmaceutical, biotechnology, medical device,
and diagnostics companies' ability to increase 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

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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.

The Ventiv Approach

By providing a complete line of value-added marketing services for the life
sciences industry, Ventiv 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. Repeat business, which we define as recurring and contracted new
business from existing clients, is projected to account for approximately 80%
of our total revenues in fiscal 2000, which is consistent with our historical
trends.

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 Ventiv'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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Ventiv'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 maintains 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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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

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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
and 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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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 examples where CSG's efforts have helped our client's product to
become 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 Ventiv's high level of
salesforce 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 helped a
client elevate 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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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 salesforce 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 salesforce 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 salesforce 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 salesforce 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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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 salesforce 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 23% worldwide market share and
significant operations throughout Western Europe (United Kingdom, Germany,
France and Hungary) and the United States. The healthcare marketing services
industry is highly fragmented. 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 the United States,
Germany, France and the United Kingdom, constituting four of the top six
worldwide pharmaceutical markets. We are also a significant provider of medical
communications and strategic sales and marketing planning. We service a large
number of physicians, nurses, pharmacists and formularies. 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.

A Broad and Integrated Service Offering. We offer a broad and integrated
range of services, from the education of physicians on a drug's development,
through the strategic analysis and design of a 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 our highly
trained 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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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. 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 18 of the 20
largest pharmaceutical companies as clients, 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. The experience of our management
team in the pharmaceutical and marketing industries ranges from 9 to 26 years.
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 4,200-person salesforce. Because of our
high level of quality service, our 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 18 of the 20 largest pharmaceutical companies,
which clients accounted for approximately 65.9% of our total revenues for the
six months ended June 30, 1999. Our ten largest clients comprised approximately
60.9% and 56.5% 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. In 1997, Bristol-Myers Squibb and
AstraZeneca represented 12.7% and 12.0%, respectively, of our revenues. In
1998, AstraZeneca and Bristol-Myers Squibb represented 13.9% and 10.4%,
respectively, of our revenues. For the six months ended June 30, 1999, no
single client represented more than 10% of our revenues. 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.

We have developed sustained relationships with blue chip clients that 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. Set forth below is a list
of our clients which provided 3% or more of our revenues for the six months
ended June 30, 1999:

Abbott Laboratories
AstraZeneca Glaxo Wellcome

Bristol-Myers Johnson & Johnson
Squibb
Merck
Eli Lilly
Endo Monsanto Company
Pharmaceuticals
Novartis

Competition Forest Laboratories

We believe that no other organization offers the same scope of integrated
healthcare marketing services as we offer our clients. 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. Ventiv,

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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 Ventiv 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 June 30, 1999, we employed over 4,700 people worldwide, including
approximately 2,900 employees in the United States and 1,800 in Europe. Of
these worldwide employees, approximately 30% 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............................... 2,448 105 2,553
U.K. Contract Sales............................... 510 42 552
French Contract Sales............................. 1,041 29 1,070
German Contract Sales............................. 218 30 248
----- --- -----
Total Contract Sales.............................. 4,217 206 4,423
Healthcare Communications......................... N/A 245 245
Health Products Research.......................... N/A 99 99
----- --- -----
Total Worldwide Employees......................... 4,217 550 4,767
===== === =====
</TABLE>
- --------

As of June 30, 1999.

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. These laws regulate the distribution of drug
samples by mandating storage, handling and record-keeping requirements for drug
samples and by banning the purchase or sale of drug

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samples. In certain jurisdictions, including the United Kingdom and France,
pharmaceutical sales representatives are subject to examination and licensing
requirements under local law and industry guidelines. Ventiv believes it is in
compliance in all material respects with these regulations.

Our physician education services are also subject to a variety of federal and
state regulations relating to both the education of medical professionals and
the marketing and sale of pharmaceuticals. In addition, certain ethical
guidelines promulgated by the American Medical Association govern the receipt
by physicians of gifts in connection with the marketing of healthcare products.
These guidelines govern the honoraria and other items of value which AMA
physicians may receive, directly or indirectly, from pharmaceutical companies.
Ventiv follows similar guidelines in effect in other countries where it
provides services. Any changes in such regulations or their application could
have a material adverse effect on Ventiv. Failure to comply with these
requirements could result in the imposition of fines, loss of licenses and
other penalties and could have a material adverse effect on Ventiv.

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 Ventiv.

Properties

Our headquarters is located in Somerset, New Jersey at a site we lease.
Ventiv 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, in the United
States, the United Kingdom and in continental Europe. Of the total 168,300
square feet of owned and leased space, 21,100 square feet are utilized by the
Health Products Research Group, 80,100 by the Healthcare Communications Group,
and 67,100 by the Contract Sales Group. We believe that our properties are well
maintained and are in good operating condition.

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.

35
<PAGE>

SELECTED FINANCIAL DATA

The following table summarizes certain historical financial data with respect
to Ventiv and is qualified in its entirety by reference to, and should be read
in conjunction with, the Ventiv 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 Ventiv. Historical financial
information may not be indicative of Ventiv's future performance as an
independent company. 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 Ventiv had been taxed similarly to a C corporation for all
periods presented. 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 Six Months
Ended June 30, 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................ $ 181,259 $ 151,313 $321,500 $ 208,967 $144,704 $120,354 $91,865
========= ========= ======== ========= ======== ======== =======
Net income (loss)....... $ 12,639 $ 2,618 $ 1,446 $ (8,718) $ 83 $ 8,430 $ 5,306
========= ========= ======== ========= ======== ======== =======
Unaudited:
Pro forma historical
basic and diluted net
income (loss) per
share (2).............. $ 0.52 $ 0.11 $ 0.06
========= ========= ========
Pro forma adjusted net
income
(loss)................. $ 12,639 $ 2,618 $ 1,446 $ (10,700) $ (2,729) $ 5,131 $ 3,745
========= ========= ======== ========= ======== ======== =======
Pro forma adjusted basic
and diluted net income
(loss) per share (2)... $ 0.52 $ 0.11 $ 0.06
========= ========= ========
Shares used in computing
net income (loss) per
share (2).............. 24,229 24,229 24,229
========= ========= ========
Balance Sheet Data:
Total assets............ $228,095 $193,644 $ 100,947 $ 51,180 $ 58,623 $41,742
========= ======== ========= ======== ======== =======
Long-term debt.......... $ 1,270 $ 1,473 $ 4,154 $ 2,634 $ 1,420 $ 3,628
========= ======== ========= ======== ======== =======
Total investments and
advances from Snyder
Communications, Inc.
(1).................... $158,771 $119,727 $ 10,371 $ 4,697 $ 13,591 $ 6,683
========= ======== ========= ======== ======== =======
</TABLE>
- --------
(1) Investments and advances from Snyder represent the net cash transferred to
Ventiv from Snyder and businesses acquired by Snyder and contributed to
Ventiv. No amounts are expected to be repaid to Snyder.

36
<PAGE>

UNAUDITED PRO FORMA FINANCIAL DATA

The following unaudited pro forma financial data reflect the distribution as
if it had occurred on January 1, 1998 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 Ventiv operated as an
independent entity, Ventiv's effective income tax rate subsequent to the
distribution and the effects of significant acquisitions as if they had been
consummated on January 1, 1998. These data do not necessarily reflect the
results of operations or financial position of Ventiv that would have resulted
had the distribution actually been consummated as of such date. These data also
exclude the estimated $16.0 million of transaction expenses associated with the
spin-off which will be borne by Snyder. These data are not indicative of the
future results of operations or future financial position of Ventiv.

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(in thousands)

<TABLE>
<CAPTION>
Purchased
Ventiv Subsidiary Pro Forma Pro Forma
Historical Historical (5) Entries Ventiv
---------- -------------- --------- ---------
<S> <C> <C> <C> <C>
Revenues....................... $181,259 $1,927 $ -- $183,186
Operating expenses:
Cost of services........... 137,028 976 -- 138,004
Selling, general, and
administrative expenses... 21,585 493 413 (1) 22,491
Restricted stock
compensation ............. -- -- 475 (4) 475
Acquisition and related
costs..................... 1,694 -- -- 1,694
-------- ------ ----- --------
Income from operations......... 20,952 458 (888) 20,522
Interest expense............... (123) -- -- (123)
Investment income.............. 373 8 -- 381
-------- ------ ----- --------
Income before income taxes..... 21,202 466 (888) 20,780
Income tax (provision) benefit. (8,563) (178) 360 (2) (8,381)
-------- ------ ----- --------
Net income..................... $ 12,639 $ 288 $(528) $ 12,399
======== ====== ===== ========
</TABLE>

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 1998
(in thousands)

<TABLE>
<CAPTION>
Purchased Pro Pro
Ventiv Subsidiaries Forma Forma
Historical Historical (3) Entries Ventiv
---------- -------------- ------- --------
<S> <C> <C> <C> <C>
Net revenues................... $321,500 $14,128 $ -- $335,628
Operating expenses:
Cost of services........... 236,047 9,360 -- 245,407
Selling, general, and
administrative expenses... 43,029 3,516 825 (1) 47,370
Restricted stock
compensation ............. -- -- 2,650 (4) 2,650
Compensation to
stockholders.............. 742 -- -- 742
Acquisition and related
costs..................... 26,922 -- -- 26,922
-------- ------- ------- --------
Income from operations......... 14,760 1,252 (3,475) 12,537
Interest expense............... (2,315) -- -- (2,315)
Investment income.............. 1,850 49 -- 1,899
-------- ------- ------- --------
Income (loss) before income
taxes......................... 14,295 1,301 (3,475) 12,121
Income tax (provision) benefit. (12,849) (658) 1,410 (2) (12,097)
-------- ------- ------- --------
Net income (loss).............. $ 1,446 $ 643 $(2,065) $ 24
======== ======= ======= ========
</TABLE>

37
<PAGE>

- --------

(1) Reflects additional costs associated with employment agreements executed
for the three newly created executive positions of Chief Executive
Officer, Chief Financial Officer and Vice President of Business
Development and Strategy of Ventiv Health, Inc. These employment
agreements provide for aggregate base compensation of $825,000 per year.
In addition to these employment agreements, the Company expects to hire
additional employees, enter into additional agreements for office space,
professional services, advertising and other general and administrative
services associated with operating as a stand-alone public company. The
Company estimates that these additional expenses will be approximately
$5.8 million per year, however, there can be no assurance that actual
costs will not exceed these estimates. These estimated costs are not
reflected in the accompanying pro forma financial data.
(2) Reflects the effect of the estimated increase in Ventiv'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, CLI Pharma S.A. and PromoTech Research Associates, Inc. from January
1, 1998 through their respective dates of acquisition.

38
<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 Ventiv were integrated with Snyder's other operating units.
The following information should be read in conjunction with Ventiv's Financial
Statements and notes thereto included elsewhere in this Information Statement.
See "Index to Financial Statements."

Overview

Ventiv's services are designed to develop, execute and monitor strategic
marketing plans for pharmaceutical and other life sciences products to conduct
educational research and communication services for the medical community.
Snyder created the business conducted by Ventiv 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 Ventiv's Contract Sales Group, and 3,183,281
were to companies in Ventiv'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 $16.3 million in March 1999. We
plan to focus on internal growth for the foreseeable future as the primary
means of our expansion, although we will consider attractive acquisition
opportunities as they arise.

We expect that the complementary services which Ventiv is able to offer to
its customers as a result of 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 a 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
Ventiv'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, Ventiv
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
Ventiv. The amount by which the historical compensation of these stockholders
exceeds that provided in their employment contracts with Ventiv has been
classified as compensation to stockholders.

Recapitalization costs were recorded by one of the companies acquired by
Ventiv in 1998 at the time of its recapitalization in 1997.

39
<PAGE>

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 the pooling of interests
transactions, as well as the costs of consolidating certain of our acquired
operations.

The following sets forth, for the periods indicated, certain components of
Ventiv'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 Ventiv had been taxed as a C corporation for all periods
presented. Compensation to stockholders, recapitalization costs and acquisition
costs are considered to be nonrecurring by Ventiv because Ventiv's current
operations will not result in any compensation to stockholders,
recapitalization costs or acquisition costs in future periods.

<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
(unaudited) 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................ $181,259 100% $151,313 100% $321,500 100.0% $208,967 100.0% $144,704 100.0%
Operating expenses:
Cost of services........ 137,028 75.6 109,677 72.5 236,047 73.4 156,346 74.8 104,922 72.5
Selling, general, and
administrative
expenses............... 21,585 11.9 19,929 13.2 43,029 13.4 32,787 15.7 25,960 17.9
Compensation to
stockholders........... -- -- 515 0.3 742 0.2 15,638 7.5 12,340 8.5
Recapitalization costs.. -- -- -- -- -- -- 1,889 0.9 -- --
Acquisition and related
costs.................. 1,694 0.9 11,356 7.5 26,922 8.4 8,042 3.8 -- --
-------- ---- -------- ---- -------- ----- -------- ----- -------- -----
Income (loss) from
operations............. 20,952 11.6 9,836 6.5 14,760 4.6 (5,735) (2.7) 1,482 1.1
Interest expense........ (123) (0.1) (1,078) (0.7) (2,315) (0.7) (1,617) (0.8) (691) (0.5)
Investment income....... 373 0.2 655 0.4 1,850 0.6 568 0.3 796 0.6
-------- ---- -------- ---- -------- ----- -------- ----- -------- -----
Income (loss) before
income taxes........... 21,202 11.7 9,413 6.2 14,295 4.5 (6,784) (3.2) 1,587 1.2
Income tax provision.... (8,563) (4.7) (6,795) (4.5) (12,849) (4.0) (1,934) (0.9) (1,504) (1.0)
-------- ---- -------- ---- -------- ----- -------- ----- -------- -----
Net income (loss)....... $ 12,639 7.0% $ 2,618 1.7% $ 1,446 0.5% $ (8,718) (4.1)% $ 83 0.2%
======== ==== ======== ==== ======== ===== ======== ===== ======== =====
Pro forma adjusted net
income (loss).......... $ 12,639 7.0% $ 2,618 1.7% $ 1,446 0.5% $(10,700) (5.1)% $ (2,729) (1.9)%
======== ==== ======== ==== ======== ===== ======== ===== ======== =====
</TABLE>

Six Months Ended June 30, 1999, Compared to Six Months Ended June 30, 1998

Revenues. Revenues increased $30.0 million, or 19.8%, to $181.3 million in
the first half of 1999 from $151.3 million in the first half of 1998. $14.0
million, or 46.7%, of the revenue growth was achieved within our French sales
operation mainly as a result of the purchase of CLI Pharma S.A. ("CLI Pharma")
in March of 1998. $14.9 million, or 49.7%, of the revenue growth was achieved
within our U.S. Contract Sales Group primarily as a result of new contracts
which were secured in the first half of 1999, an incentive compensation payment
received from a client and also by the purchase of Healthcare Promotions, LLC
("HCP") in 1998 which has been integrated into our U.S. Contract Sales Group.
Decreases in revenues at our U.K. and German sales operations of $5.9 million,
or 14.9%, resulted from a lower level of contracted sales service performed in
1999 compared with 1998. This decrease in revenue was offset by a $3.6 million,
or 47.1%, increase in revenue from our Health Products Research group which
reflects new business contracts secured for 1999, and $3.0 million in revenue
from PromoTech Research Associates which was purchased by Ventiv in March of
1999. Revenue at our European contract sales organizations is typically lower
during the third quarter due to the traditional European holiday season in July
and August.

Cost of services. Cost of services increased $27.3 million, or 24.9%, to
$137.0 million in the first half of 1999 from $109.7 million in the first half
of 1998. The dollar fluctuation in cost of services at our various

40
<PAGE>

operating units corresponds to the revenue changes discussed above. Cost of
services was favorably impacted by a one-time $2.0 million reduction in the
estimated amount of employee-related social costs to be paid as a result of the
integration of our French sales force. Cost of services as a percentage of
revenues increased to 75.6% in the first half of 1999 from 72.5% in the first
half of 1998 due in part to the start-up costs associated with the new
contracts in both the Health Products Research group and the U.S. Contract
Sales Group. We expect to continue to incur start-up costs as we secure
additional contracts for new business and will also continue to make
investments in our operating infrastructure which could result in increased
costs.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $1.7 million, or 8.5%, to $21.6 million in
the first half of 1999 from $19.9 million in the first half of 1998. Selling,
general, and administrative expenses as a percentage of revenue decreased to
11.9% in the first half of 1999 from 13.2% in the first half of 1998 as a
result of the integration of acquired businesses into our existing operations
and the close monitoring and containment of these expenses as our revenues have
increased. Selling, general, and administrative expenses include only those
amounts specifically identifiable to Ventiv and may increase in future periods
when Ventiv operates as a separate publicly traded company.

Compensation to Stockholders. No compensation to stockholders was recorded
during the six months ended June 30, 1999. Compensation to stockholders was
$0.5 million during the six months ended June 30, 1998. Compensation to
stockholders reflects compensation paid to certain stockholders of acquired
companies prior to their respective mergers with Ventiv that is in excess of
the compensation provided for in their employment contracts with Ventiv. No
compensation to stockholders is recorded subsequent to an acquisition by
Ventiv.

Acquisition and Related Costs. Ventiv recorded $1.7 million in acquisition
and related costs during the six months ended June 30, 1999 due to the
consolidation and integration of certain of Ventiv'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 $0.4 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., the U.K. and France. As of June 30, 1999, 149
employees had terminated employment with Ventiv and $9.0 million had been
charged against the total liability of $12.4 million. Ventiv recorded $11.4
million in acquisition and related costs during the six months ended June 30,
1998, and $7.0 million of these costs were related to the consummation of
pooling of interests transactions during the six months ended June 30, 1998.
Ventiv completed two pooling of interests transactions valued at approximately
$91.4 million during the six months ended June 30, 1998. The remaining $4.4
million was due to the consolidation and integration of certain of Ventiv's
acquired operations within the Contract Sales Group.

Interest Expense. Ventiv recorded $0.1 million of interest expense during the
six months ended June 30, 1999 and $1.1 million of interest expense during the
six months ended June 30, 1998. Ventiv does not have any significant debt
obligations outstanding. The interest expense recorded during the six months
ended June 30, 1998 consists primarily of interest on debt at acquired
companies prior to their acquisition by Ventiv. Ventiv generally repaid the
debt of its acquired companies. If Ventiv borrows money for acquisitions or for
other purposes following the spin-off, interest expense will increase in future
periods.

Investment Income. Ventiv recorded $0.4 million of investment income during
the six months ended June 30, 1999 and $0.7 million of investment income during
the six months ended June 30, 1998. Variations in investment income result from
differences in average amounts of cash and cash equivalents available for
investment during these periods.

Income Tax Provision. Ventiv recorded a tax provision of $8.6 million during
the six months ended June 30, 1999. Ventiv's effective tax rate on its
recurring operations is approximately 39.1% for the six months ended June 30,
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.

41
<PAGE>

Net Income (Loss). Net income increased $10.0 million to $12.6 million in the
first half of 1999 from $2.6 million in the first half of 1998 due primarily to
Ventiv's overall growth discussed above, the decrease in nonrecurring
acquisition and related costs and other factors discussed above. To facilitate
our growth, we intend to make investments in Ventiv over the next 12 to 18
months to promote the business and its name, to further enhance the skills of
our employees, to further business development efforts, and to make further
investment in technology. We expect that our additional investment in Ventiv to
expand the business will increase our expenses over the next 12 to 18 months.

In August 1999, we entered into an agreement with an existing client to
expand the level of service provided. Under this service agreement, which is
cancelable by our client with six months prior notice, we expect to recognize
over $100 million in revenues over the next 18 months. During the third and
fourth quarters of 1999, we expect to recognize a total of approximately $12.0
million of start-up related expenses to hire, train, and equip our salesforce
in connection with this new agreement, with new recorded revenue directly
associated with these expenses during these periods.

We have agreed to provide incremental consideration for the acquisition of
PromoTech Research Associates based on the average trading price of one or more
classes of Snyder common stock and Ventiv common stock for the twenty trading
days ending on October 15, 1999 (or such lesser number of days that a public
market exists for these securities up to October 15, 1999). Based on the
closing price of Snyder common stock on August 26, 1999, the amount of such
payment would result in non-cash expense of approximately $4.3 million, payable
in Ventiv common stock.

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. We experienced revenue growth at each of our
operating companies during 1998 and it consists of an $82.3 million, or 50.7%,
increase at our Contract Sales Group, a $26.7 million, or 77.9%, increase at
our Healthcare Communications Group, and a $3.5 million, or 28.0%, increase at
our Health Products Research group. The increased revenue in our Contract Sales
Group resulted in the growth of services provided to both new and existing
customers during 1998, the purchase of HCP and CLI Pharma in the first quarter
of 1998, and the purchase of Halliday Jones in the third quarter of 1997. The
increased revenue in both the Healthcare Communications Group and the Health
Products Research group is attributable to the growth services provided to new
and existing customers during 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 as a result of the increased
revenues discussed above. Cost of services as a percentage of revenues
decreased to 73.4% in 1998 from 74.8% in 1997. This is due to Ventiv'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 as a result of the growth in revenues discussed
above. 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 and
the lower proportional increase in selling, general and administrative expenses
necessary to support the revenue growth.

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 Ventiv that is in excess of the compensation provided
for in their employment contracts with Ventiv. The amount by which the
historical compensation paid to these stockholders exceeds the amount provided
for in their respective employment contracts with Ventiv has been classified as
compensation to stockholders. No compensation to stockholders is recorded
subsequent to an acquisition by Ventiv. The $0.7 million recorded in 1998
relates to certain companies acquired in the third and

42
<PAGE>

fourth quarters of 1998, and therefore, was incurred during 1998 by the
acquired companies prior to their acquisition.

Acquisition and Related Costs. Ventiv 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 Ventiv's acquired operations in the U.S., the U.K. and France.
Ventiv is integrating acquired subsidiaries that provide similar services
within the same geographic regions. Approximately nine locations have been
consolidated into four, and the efforts have not had a significant impact on
Ventiv's workforce. Ventiv 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.

Ventiv 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 Ventiv's results of operations for 1997 as
compared to 1996.

Interest Expense. Ventiv recorded $2.3 million of interest expense in 1998
and $1.6 million of interest expense in 1997. Ventiv 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 Ventiv. Ventiv generally repaid the debt of
acquired companies.

Investment Income. Ventiv 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. Ventiv recorded a tax provision of $12.8 million during
1998. Ventiv'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.

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 Ventiv's
overall growth and containment of costs.

Pro Forma Adjusted Net Income (Loss). Pro forma adjusted net income (loss)
shows the effect on net income (loss) assuming Ventiv and its subsidiaries were
taxed as C corporations for all of 1998 and 1997. Pro forma adjusted net income
(loss) is less than net income (loss) for 1997. Pro forma adjusted net income
(loss) increased $12.1 million to pro forma net income of $1.4 million in 1998
from a pro forma 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.

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. We experienced revenue growth at each of our
operating companies during 1997 including a $53.6 million, or 49.4%, increase
at our Contract Sales Group, an $8.3 million, or 31.5%, increase at our
Healthcare Communications Group, and a $2.4 million, or 23.9%, increase at our
Health Products Research group. The

43
<PAGE>

increased revenue in our Contract Sales Group resulted from the growth of
services provided to both new and existing customers during 1997 and the
purchase of Halliday Jones in 1997. The increased revenue in both the
Healthcare Communications Group and the Health Products Research group is
attributable to the growth services provided to new and existing customers
during 1997.

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 as a result of the increased
revenues discussed above. 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 as a result of the increased revenues discussed
above. 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 Ventiv that is in excess of the compensation provided
for in their employment contracts with Ventiv. The amount by which the
historical compensation paid to these stockholders exceeds the amount provided
for in their respective employment contracts with Ventiv has been classified as
compensation to stockholders. No compensation to stockholders is recorded
subsequent to an acquisition by Ventiv. 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 Ventiv.

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 Ventiv. No recapitalization costs were incurred in 1996, and Ventiv
does not expect to incur any recapitalization costs in future periods.

Acquisition and Related Costs. Ventiv 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. Ventiv recorded $1.6 million of interest expense in 1997
and $0.7 million of interest expense in 1996. Ventiv 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 Ventiv. Ventiv generally repaid the debt of
acquired companies.

Investment Income. Ventiv 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. Ventiv recorded a tax provision of $1.9 million during
1997. Ventiv'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.

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 Ventiv through its 1997 acquisitions.

44
<PAGE>

Pro Forma Adjusted Net Income (Loss). Pro forma adjusted net income (loss)
shows the effect on net income (loss) assuming Ventiv and its subsidiaries were
taxed as C corporations for all of 1997 and 1996. Pro forma adjusted net income
(loss) is less than net income (loss) for both 1997 and 1996. Pro forma
adjusted net loss increased $8.0 million to a pro forma net loss of $10.7
million in 1997 from a pro forma net loss of $2.7 million in 1996. The
nonrecurring costs recorded in 1997, slightly offset by the growth of Ventiv,
resulted in the overall increase in pro forma net loss.

Liquidity and Capital Resources

At June 30, 1999, Ventiv had $21.3 million in cash and equivalents. Cash and
equivalents decreased $4.3 million during the six months ended June 30, 1999,
due to the $10.8 million used in operating activities, the $3.1 million used in
investing activities and the $0.1 million effect of changes in the exchange
rate offset by the $9.5 million provided by financing activities. The $9.5
million in cash provided by financing activities consists primarily of $11.2
million investments and advances from Snyder offset by $1.7 million net
repayments of debt. The $3.1 million in cash used in investing activities
consists primarily of capital expenditures and the purchases of PromoTech, 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.

In 1997 and 1998, we incurred approximately $34.9 million in acquisition and
related costs as a result of pooling of interests transactions and integration
of acquired companies. As a result, cash provided from operations was not
sufficient to fund operations, including acquisition and related costs, during
those years. For the first six months of 1999, a net of $10.9 million cash was
used in operating activities due to working capital changes. We believe that
our cash and equivalents, as well as cash provided by operations, will be
sufficient to fund our current operations and planned capital expenditures over
the next 12 months and also for a longer-term basis. We plan to focus on
internal growth for the foreseeable future as the primary means of our
expansion, although we will consider attractive acquisition opportunities as
they arise. Cash provided from operations may not be sufficient to fund
internal growth initiatives which we may pursue. If we pursue significant
internal growth initiatives or if we acquire additional businesses in
transactions that include any cash payment as part of the purchase price, both
in the short-term and the long-term, we will first use excess cash available
from operations and then pursue additional debt or equity financing as sources
of cash necessary to complete any acquisitions. Ventiv does not currently have
its own line of credit. We expect to obtain a multi-year line of credit for
acquisitions and general corporate purposes during the second half of 1999. In
addition to borrowing under a line of credit, once available, Ventiv could
pursue additional debt or equity transactions to finance its acquisitions,
depending on market conditions. We can't assure you that we will be successful
in raising the cash required to complete all acquisition opportunities which we
may pursue in the future.

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 our exposure to
exchange rate risk but do not currently hedge such risk.

We do not expect the introduction of the Euro to have a material impact on
our operations or cash flows in the near term. We will continue to evaluate the
impact of the introduction of the Euro as we continue to expand our services in
Europe.

As of June 30, 1999, Ventiv's management believes that the fair value of
Ventiv exceeds its book value.

Year 2000

Ventiv 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 no material additional costs will be incurred. However, we cannot assure
you that this will be the case until these systems are operational in 2000.

45
<PAGE>

Approximately $0.5 million was incurred through June 30, 1999 to address
specific year 2000 requirements. We have made inquiries of our vendors and
other third parties that we have identified whose year 2000 problems could
affect our systems or operations and have received assurances from
approximately 96% of the vendors contacted, both written and oral, that their
systems are compliant or are expected to be compliant on time. Approximately
52% of vendors contacted indicated to us that they are currently year 2000
compliant and approximately 44% of vendors contacted indicated to us that they
will be year 2000 compliant before the year 2000 begins. Approximately 4% of
the vendors contacted did not provide information in response to our inquiries.
In the event the statements and warranties of these third parties concerning
their year 2000 compliance are incorrect resulting in critical systems failure,
our business and operations may be materially adversely affected.

Effect of Inflation

Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from changes in market interest rates and
foreign currency exchange rates. We are subject to interest rate risk on our
debt for changes in the fair value of our debt caused by changes in the
interest rates. We are subject to foreign currency exchange rate risk related
to our international operations. The long-term debt outstanding at December 31,
1998 is $1.5 million and is fixed rate. A change in the current market interest
rates on all outstanding debt interest rates at December 31, 1998 would not
materially impact the financial statements as the amount of debt effected would
not be material. We do not currently engage in hedging or other market risk
management tools.

Foreign Currency Exchange Rate Exposures. Fluctuations in foreign currency
exchange rates affect the reported amounts of our assets, liabilities and
operations. For purposes of quantifying the risk associated with fluctuations
in the foreign exchange rate, we used a sensitivity analysis model. We assumed
a hypothetical detrimental change of 10% in the exchange rates on our assets,
liabilities and revenues denominated in a foreign currency. A 10% fluctuation
was assumed for all exchange rates at December 31, 1998. Our material exposures
to foreign exchange rate fluctuations on continuing operations are the French
franc, British pound and German mark. Approximately 44%, 38% and 15% of our
1998 international operations were conducted in France, the United Kingdom and
Germany, respectively. The amounts below represent the impact of all exchange
rates on our total assets, liabilities and revenues.

<TABLE>
<CAPTION>
10% Decrease in value
Balance at of Local Currencies to
December 31, 1998 U.S. Dollar
----------------- ----------------------
<S> <C> <C>
Assets.............................. $193,644 $188,903
Liabilities......................... $ 73,917 $ 69,915
Revenue............................. $321,500 $307,354
</TABLE>

46
<PAGE>

MANAGEMENT

Directors

The following individuals are expected to serve as directors of Ventiv 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.................. 37 Co-Chairperson of the Board of Directors
Mortimer B. Zuckerman.............. 62 Director
Fred Drasner....................... 56 Director
A. Clayton Perfall................. 40 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 Ventiv, 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 Ventiv, 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.

A. Clayton Perfall, a director of Ventiv, has served as Chief Financial
Officer and a director of Snyder since September 1996. Prior to joining Snyder,
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 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.

Eran Broshy, Chief Executive Officer and a director of Ventiv, served as the
practice leader of the North American healthcare consulting practice of the
Boston Consulting Group from 1991 to 1998. During his tenure at the Boston
Consulting Group, Mr. Broshy consulted broadly with senior executives from a
number of the major global pharmaceutical leaders, managed care organizations,
and academic medical centers and advised on a range of strategic,
organizational and operational issues. 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, one additional independent director
will be designated prior to or promptly following the distribution.

47
<PAGE>

Directors' Meetings and Committees

The Board of Directors of Ventiv 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 Ventiv will
review and make reports and recommendations to the full Board of Directors with
respect to the selection of the independent auditors of Ventiv 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
Ventiv, and will review the annual financial statements of Ventiv. The members
of the Audit Committee will be designated prior to or promptly following the
distribution.

Compensation Committee. The Compensation Committee of the Board of Directors
of Ventiv will be responsible for approving compensation arrangements for
executive management, reviewing compensation plans relating to officers, grants
of options and other benefits under Ventiv's employee benefit plans and
reviewing generally Ventiv's employee compensation policy. The members of the
Compensation Committee will be designated prior to or promptly following the
distribution.

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
Ventiv will receive an annual director's fee paid in either cash, shares of
Ventiv 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
Ventiv after the distribution.

<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Eran Broshy............................ 40 Chief Executive Officer and Director
Gregory S. Patrick..................... 48 Chief Financial Officer
Robert Brown, Ph.D..................... 55 Chief Executive Officer,
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."

Gregory S. Patrick, Chief Financial Officer of Ventiv, served as Vice
President and Group Controller of Merck & Co., Inc., with responsibility for
Merck's research laboratories, vaccines and Asia/Pacific human health marketing
divisions since February 1999. From 1991 to February 1999, Mr. Patrick served
as Vice President and Controller of Merck's manufacturing division, where he
structured and negotiated a number of Merck's significant joint ventures and
licensing agreements. Prior to joining Merck, Mr. Patrick was an associate with
the consulting firm Booz, Allen & Hamilton and also held a range of financial
and engineering positions at Exxon Chemical Company. Mr. Patrick has an MBA
from New York University and an ME and BS from Rensselaer Polytechnic
Institute.

Robert Brown, Ph.D., served as President of Health Products 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.

48
<PAGE>

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.

49
<PAGE>

EXECUTIVE COMPENSATION

Historical Compensation

The following table sets forth certain information with respect to the annual
and long-term compensation of Ventiv's four most highly compensated executive
officers for fiscal 1998 and Ventiv's Chief Executive Officer, who was not
employed by Ventiv until June 1999. Mr. Patrick, Ventiv's Chief Financial
Officer, was not employed by Ventiv until August 1999 and is not included in
the table below. 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> <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

50
<PAGE>

value of shares of Snyder common stock as of December 31, 1998 over the
respective exercise prices of outstanding stock options.

<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>

Ventiv Compensation and Benefit Plans

The separation of the healthcare services business from the remaining
businesses of Snyder in connection with the distribution will allow Ventiv 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 Ventiv's management team will receive
stock compensation in the form of options to purchase Ventiv common stock.

Pursuant to Eran Broshy's employment agreement, he will receive an aggregate
of $4,000,000 in options to purchase shares of Ventiv common stock and an
aggregate of $2,500,000 in restricted Ventiv common stock immediately following
the consummation of the distribution. See "Executive Compensation--Employment
Agreements." Gregory Patrick will be granted an aggregate of $1,000,000 in
restricted Ventiv common stock and the other four members of Ventiv's
management team will be granted $500,000 in restricted Ventiv common stock
immediately following the distribution at the closing price of the Ventiv
common stock on the distribution date. Twenty percent of Mr. Broshy's
restricted shares of Ventiv common stock will vest immediately following the
distribution, and the balance will vest in equal installments over the next
four years. Forty percent of shares of restricted Ventiv common stock granted
to the other five members of Ventiv's management team will vest immediately
following the distribution, and the balance will vest in equal installments
over the next four years.

It is anticipated that total compensation for Ventiv'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.

1999 Stock Incentive Plan

The purpose of the 1999 Stock Incentive Plan is to promote the long-term
growth of Ventiv by rewarding key management employees, consultants and
directors of Ventiv with a proprietary interest in Ventiv 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 Ventiv. The participants in
the plan are the officers, key employees, directors and consultants of Ventiv,
and the awards to a participant under the plan may be in the form of an option,
restricted stock, a stock appreciation right, or a combination thereof, at the
discretion of the Compensation Committee.

Shares Subject to the 1999 Stock Incentive Plan. Subject to adjustment as
discussed below, we will make available under the stock incentive plan
shares of Ventiv common stock, increased by % of the number of shares of
Ventiv common stock authorized for issuance after the effective date of the
plan by Ventiv's Board of Directors.

51
<PAGE>

Types of Awards. Awards granted under the stock incentive plan may be in any
combination of the following:

. options to purchase shares of Ventiv common stock;

. stock appreciation rights. These are rights to receive the spread or
difference between the fair market value of shares of Ventiv common
stock subject to an option and the corresponding exercise price of the
option. The spread may be payable in either stock, cash or both; and

. restricted stock. These are awards of stock on which various
restrictions and conditions are imposed which must be satisfied in order
for the award to vest in the participant.

Eligibility. Under the terms of the stock incentive plan,

. directors,

. officers,

. employees and

. consultants

of Ventiv and its subsidiaries designated by the compensation committee
administering the stock plan are eligible to participate in the plan.

Limitation on Awards to Any Individual. Under the stock incentive plan, the
maximum number of shares of Ventiv 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.

Administration. The compensation committee of our board of directors will
administer the stock incentive plan. The compensation committee may delegate
its authority to make grants of stock options and stock appreciation rights to
persons below the rank of Senior Vice President.

Stock Options

Exercise Price. The purchase price of a share of Ventiv common stock covered
by an option may not be less than 100% of the fair market value of a share of
Ventiv common stock on the date of grant.

Termination of Employment. The compensation committee will determine when, if
at all, an option will vest when a participant in the plan leaves Ventiv.
Generally, if a participant's employment or service is terminated other than by
death or disability, his or her options will cease to vest immediately and the
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.

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.

52
<PAGE>

Upon exercise of a stock appreciation right, the participant will be entitled
to the difference between

. the fair market value of a share of Ventiv 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 compensation committee will determine the form of payment, which may be in
cash, Ventiv common stock or any combination of cash and stock.

Restricted Stock

The compensation committee may make restricted stock awards in Ventiv common
stock. The compensation committee will determine:

. the terms and conditions of the restricted stock award;

. the restricted period for the award;

. the restrictions applicable to an award, which may include continued
employment and specific corporate, divisional or individual performance
standards or goals;

. 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
Ventiv, together with stock powers executed by the participant in favor of
Ventiv, until the restricted period expires and any restrictions imposed are
satisfied.

Awards of restricted stock granted under the plan may qualify for the
performance-based compensation exemption to Section 162(m) of the Code. As
determined by the compensation committee in its sole discretion, either the
granting or vesting of these performance-based awards will be based upon
achievement of hurdle rates and/or growth in one or more of the following
business criteria:

. net earnings;

. earnings per share;

. net sales growth;

. market share;

. net operating profit;

. expense targets;

53
<PAGE>

. working capital targets relating to accounts receivable;

. operating margin;

. return on equity;

. return on assets;

. planning accuracy (as measured by comparing planned results to actual
results);

. market price per share; and

. total return to stockholders.

Amendment of the 1999 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 Ventiv common stock subject to the plan
or that may be granted to any individual in any calendar year;

. change the class of eligible participants;

. change the performance criteria; or

. remove the administration of the stock incentive plan from the committee
administering the plan.

Non-Transferability of Options

Except as provided by the compensation committee, awards may (1) not be
transferred by a participant during the participant's lifetime, (2) not be
assigned or otherwise disposed of except 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.

Corporate Changes

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:

54
<PAGE>

. 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
Ventiv 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 compensation
committee may accelerate vesting so that the options will be exercisable
in full.

Certain Federal Income Tax Consequences

The statements in the following paragraphs of the principal federal income
tax consequences of awards under the 1999 Stock Incentive Plan are based on
statutory authority and judicial and administrative interpretations, as of the
date of this information 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.

Stock Options and Stock Appreciation Rights. An individual who receives an
option or a stock appreciation right will not recognize any taxable income upon
the grant of an option or right. However, the individual generally will
recognize ordinary income upon exercise of an option in an amount equal to the
excess of the fair market value of the shares of Ventiv common 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 Ventiv or a beneficial owner of more than ten
percent (10%) of any class of equity securities of Ventiv. Absent a Section
83(b) election (as we describe it below 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 option 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 a stock
appreciation right for shares or upon the exercise of an option, Ventiv may
satisfy the liability in whole or in part by withholding shares of Ventiv
common 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 Ventiv in an
amount equal to the ordinary income included by the individual with respect to
his or her option or right, provided that such amount constitutes an ordinary
and necessary business expense to Ventiv and is reasonable and the limitations
of Sections 280G and 162(m) of the Code do not apply.

If an individual exercises an option by delivering shares of Ventiv common
stock, 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 option as if he or she paid the
exercise price in cash, and Ventiv likewise generally will be entitled to an
equivalent tax deduction.

55
<PAGE>

Other Awards. With respect to other awards under the 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 Ventiv
common stock received.

With respect to awards under the plan that are settled in shares of Ventiv
common 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 Ventiv common stock or other property under the plan will be subject to
both wage withholding and other employment taxes.

Ventiv 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
Ventiv and is reasonable and the limitations of Sections 280G and 162(m) of
the Code do not apply.

If the compensation committee permits an individual to transfer an option to
a member or members of the individual's immediate family or to a trust for the
benefit of these persons or other entity owned by these persons and the
individual makes such a transfer and the transfer constitutes a completed gift
for gift tax purposes (which determination may depend on a variety of factors
including whether the option or a portion thereof has vested) then such
transfer will be subject to federal gift tax except, generally, to the extent
protected by the individual's $10,000 per donee annual exclusion, by his or
her lifetime unified credit or by the marital deduction. The amount of the
individual's gift is the value of the option at the time of the gift. If the
transfer of the option constitutes a completed gift and the individual retains
no interest in or power over the option after the transfer, the option
generally will not be included in his or her gross estate for federal estate
tax purposes. The transfer of the option will not cause the transferee to
recognize taxable income at the time of the transfer. If the transferee
exercises the option while the transferor is alive, the transferor will
recognize ordinary income as described above as if the transferor had
exercised the option. If the transferee exercises the option after the death
of the transferor, it is uncertain whether the transferor's estate or the
transferee will recognize ordinary income for federal income tax purposes.

Dividends and Dividend Equivalents. To the extent awards under the plan earn
dividends or dividend equivalents, whether paid currently or credited to an
account established under the 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 Ventiv (as
defined in Section 280G of the Code), including payments under the 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 Ventiv and
the individual would be subject to a 20% excise tax on that portion of the
payments.

Treatment of Snyder Options Following the Distribution

Options granted under Snyder's Stock Incentive Plan to Ventiv employees will
terminate on the distribution date if unvested, and to the extent vested will
terminate in accrodance with the terms of Snyder's Stock Incentive Plan unless
exercised within 90 days following the distribution date. Ventiv intends to
grant options under its 1999 Stock Incentive Plan to Ventiv employees whose
existing Snyder stock options are terminated as a consequence of the
distribution. The new Ventiv options granted on the distribution date

56
<PAGE>

immediately following the distribution will have exercise prices equal to the
closing price of the Ventiv common stock on the distribution date and will be
exercisable for a number of shares of Ventiv common stock determined by
Ventiv's compensation committee based on the seniority and performance of the
individual employee, in accordance with the terms of Ventiv's 1999 Stock
Incentive Plan. A percentage of the new Ventiv options granted to the Ventiv
employees equal to the vested percentage of the existing Snyder options held by
each such employee will vest immediately upon the grant of the new Ventiv
options.

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, Ventiv agreed to grant to Mr. Broshy non-
qualified options to purchase an aggregate of $4,000,000 of Ventiv common stock
at an exercise price equal to the closing price of Ventiv common stock on the
distribution date. 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 Ventiv on
the applicable vesting date. Mr. Broshy's employment agreement also provides
for a grant of an aggregate of $2,500,000 in restricted Ventiv 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
Ventiv on the applicable vesting date. The restricted stock grant provided for
in his employment agreement will prohibit Mr. Broshy from transferring any of
his Ventiv common stock for a period of four years after the distribution date.
The agreement provides that upon a "change in control" of Ventiv, 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 Ventiv or the
consummation of a merger or consolidation of Ventiv which results in the Ventiv
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 Ventiv
exclusively for the purchase of Ventiv common stock.

Gregory S. Patrick. In August 1999, Ventiv retained the services of Gregory
S. Patrick as Chief Financial Officer of Ventiv. Under the terms of Mr.
Patrick's employment agreement, he will initially receive an annual base salary
of $250,000. He is also eligible for an annual bonus award based on certain
performance measures, which may not exceed $100,000. Mr. Patrick's employment
agreement provides for a grant of an aggregate of $1,000,000 in restricted
Ventiv common stock, 40% of which will vest on the distribution date and the
remaining 60% vesting in equal increments over the next four years, provided he
is still employed by Ventiv on the applicable vesting date.

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 at an exercise price of $30.44
per share, 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 at an exercise price of $28.37
per share, 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.

57
<PAGE>

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 at an exercise price of $30.44 per share,
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 at an exercise price of $30.44
per share, 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, Mr. Pollock is entitled to a severance payment equal to one-half of his
annual base salary.

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.

Ventiv 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.

58
<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the beneficial ownership of Ventiv common
stock immediately following the distribution date by each of Ventiv's
directors, its Chief Executive Officer and the executive officers who were
Ventiv'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 August 26,
1999. See "Executive Compensation--1999 Stock Incentive Plan."

<TABLE>
<CAPTION>
Number of Shares % of Shares
Name to be Beneficially Owned Outstanding (1)
- ---- ------------------------ ---------------
<S> <C> <C>
Daniel M. Snyder (2).................. 3,126,541 12.9%
Michele D. Snyder (3)................. 1,113,990 4.6
Mortimer B. Zuckerman (4)............. 1,620,078 6.7
Fred Drasner (5)...................... 783,535 3.2
A. Clayton Perfall (6)................ 86,666 *
Eran Broshy (7)....................... -- --
Dr. Robert Brown (8).................. 112,000 *
R. Jeremy Stone (8)................... 33,333 *
Allan Avery (8)....................... 224,598 1.0
William C. Pollock (8)................ 12,430 *
All directors and executive officers
as a group (7)(8)(9) (11 persons).... 7,113,171 28.9
</TABLE>

Based upon information available to Snyder concerning the ownership of shares
of Snyder common stock at August 26, 1999, no person, other than those listed
in the table above, will own beneficially more than 5% of the outstanding
Ventiv common stock on the distribution date except as follows:

<TABLE>
<CAPTION>
Shares of
Ventiv
Common
Stock to be
Received
Name and Address of in the % of Shares
Beneficial Owner Distribution Outstanding (1)
------------------- ------------ ---------------
<S> <C> <C>
Ark Asset Management Co., Inc. (10).......... 2,508,333 10.4%
Putnam Investments, Inc. (11)................ 2,975,278 12.3%
Capital Research and Management Co. (12)..... 2,675,700 11.0%
</TABLE>
- --------
* Denotes less than 1%.

(1) Based upon 72,688,315 shares of Snyder common stock outstanding as of
August 26, 1999.
(2) The address of Mr. Snyder is 6903 Rockledge Drive, 15th Floor, Bethesda,
Maryland 20817.
(3) The address of Ms. Snyder is 6903 Rockledge Drive, 15th Floor, Bethesda,
Maryland 20817.

(4) Based upon the number of shares of Snyder common stock consisting of shares
held by USN College Marketing, L.P. ("College Marketing") (a limited
partnership in which USN College Marketing, Inc. ("USN Inc.") is the
general partner and Fred Drasner is the sole limited partner) and
attributable to USN Inc.'s general partnership interest in College
Marketing. USN Inc. is owned one-third by Mortimer B. Zuckerman and two-
thirds by the MBZ Trust of 1996, for which an outside person acts as the
Trustee. Mr. Zuckerman is the sole director of USN Inc. Does not include
408,434 shares held by College Marketing that are beneficially owned by Mr.
Drasner. See Note 5. Mr. Zuckerman's address is 599 Lexington Avenue, Suite
1300, New York, New York 10022. The address of MBZ Trust of 1996 is c/o
Boston Properties, 8 Arlington Street, Boston, Massachusetts 02116.

(5) Based upon the number of shares of Snyder common stock consisting of (i)
108,434 shares owned by Mr. Drasner in his individual capacity and over
which he exercises sole voting and investment discretion, (ii) 408,434
shares beneficially owned by Mr. Drasner as limited partner in College
Marketing and (iii) 266,666 shares beneficially owned by Mr. Drasner as a
result of his ownership of F.D. Sutton, LLC ("Sutton"), a limited liability
company of which Mr. Drasner is the sole member. Mr. Drasner's address is
450 W. 33rd Street, New York, New York 10001.

59
<PAGE>

(6) Based upon shares of Snyder common stock issuable upon exercise of
currently exercisable Snyder options. The address of Mr. Perfall is 6903
Rockledge Drive, 15th Floor, Bethesda, Maryland 20817.

(7) Does not include shares of Ventiv common stock issuable pursuant to the
exercise of $4,000,000 in Ventiv stock options to be issued to Mr. Broshy
immediately following the distribution or $2,500,000 in restricted Ventiv
common stock to be granted to Mr. Broshy immediately following the
distribution, as there is no existing per share price of Ventiv common
stock to calculate the number of shares of Ventiv common stock to be
received pursuant to such grants.

(8) Does not include $500,000 in restricted Ventiv common stock to be granted
to each of Drs. Brown and Stone and Messrs. Avery and Pollock, in each case
immediately following the distribution, as there is no existing per share
price of Ventiv common stock to calculate the number of shares of Ventiv
common stock to be received by these individuals pursuant to such grants.
The address of Drs. Brown and Stone and Messrs. Avery and Pollock is 200
Cottontail Lane, Vantage Court North, Somerset, New Jersey 08873.

(9) Does not include shares of Ventiv common stock represented by $1,000,000 in
restricted Ventiv common stock to be granted to Mr. Patrick immediately
following the distribution, as there is no existing per share price of
Ventiv common stock to calculate the number of shares of Ventiv common
stock to be received pursuant to such grant.

(10) Ownership is as reported on Schedule 13G of Ark Asset Management Co., Inc.
and is as of January 6, 1999. Ark's address is One New York Plaza, 29th
Floor, New York, New York 10004.

(11) Ownership is as reported in the Schedule 13G dated February 11, 1999,
filed by Putnam Investments, Inc. ("Putnam"), Putnam, a wholly owned
subsidiary of Marsh & McLennan Companies, Inc. ("MMC").

(12) Ownership is as reported in Schedule 13G of Capital Research and
Management Co. and is as of July 9, 1999. Capital's address is 333 South
Hope Street, 55th Floor, Los Angeles, California 90071.

60
<PAGE>

DESCRIPTION OF CAPITAL STOCK

Authorized Capital Stock

The total number of shares of all classes of stock that Ventiv presently has
authority to issue is 1,000 shares of Ventiv common stock. Under the
certificate that will be in effect on the distribution date, Ventiv will have
authority to issue a total of 60,000,000 shares of all classes of stock, of
which 10,000,000 may be shares of preferred stock and 50,000,000 may be shares
of common stock.

Based on the number of shares of Snyder common stock outstanding as of August
26, 1999 and the distribution ratio, it is expected that 24,229,438 shares of
Ventiv common stock will be distributed to Snyder stockholders in the
distribution. All the shares of Ventiv common stock to be distributed to Snyder
stockholders in the distribution will be fully paid and non-assessable. The
Ventiv common stock to be distributed will constitute all the shares of capital
stock of Ventiv that will be outstanding immediately after the distribution.

Ventiv Common Stock

Holders of Ventiv common stock are entitled to one vote for each share on all
matters voted on by stockholders. Holders of Ventiv 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 Ventiv 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 Ventiv common
stock are entitled to participate ratably in dividends on Ventiv common stock
as declared by the Ventiv Board of Directors. Holders of Ventiv common stock
are entitled to share ratably in all assets available for distribution to
stockholders in the event of liquidation or dissolution of Ventiv, subject to
distribution of the preferential amount, if any, to be distributed to holders
of preferred stock.

Preferred Stock

Ventiv's certificate of incorporation that will be in effect on the
distribution date will authorize the Ventiv Board of Directors, without any
vote or action by the holders of Ventiv common stock, to issue up to 10,000,000
shares of preferred stock from time to time in one or more series. The Ventiv
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 Ventiv may then be quoted or listed. Depending upon
the terms of preferred stock established by Ventiv Board of Directors, any or
all series of preferred stock could have preference over Ventiv common stock
with respect to dividends and other distributions and upon liquidation of
Ventiv. Issuance of any such shares with voting powers, or issuance of
additional shares of Ventiv common stock, would dilute the voting power of the
outstanding Ventiv common stock. Ventiv has no present plans to issue any
preferred stock.

No Preemptive Rights

No holder of any capital stock of Ventiv authorized at the distribution date
will have any preemptive right to subscribe for or purchase any securities of
any class or kind of Ventiv.

Transfer Agent and Registrar

American Stock Transfer and Trust Company will be the transfer agent and
registrar for Ventiv common stock commencing upon the distribution date.

61
<PAGE>

ANTI-TAKEOVER EFFECTS OF PROVISIONS OF DELAWARE LAW, VENTIV'S
CERTIFICATE OF INCORPORATION AND BY-LAWS

The following discussion concerns certain provisions of Delaware law, the
Ventiv certificate of incorporation and our by-laws that could be viewed as
having the effect of discouraging an attempt to obtain control of Ventiv.

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 Ventiv
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 Ventiv within the three-year period only if:

. Ventiv'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

. Ventiv'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. Ventiv'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 Ventiv
may from time to time issue shares of preferred stock in one or more series,
the terms of which will be determined by Ventiv's Board of Directors, and
common stock. Ventiv will not solicit approval of our stockholders unless
Ventiv's Board of Directors believes that approval is advisable or is required
by Nasdaq National Market regulations or Delaware law. This could enable
Ventiv'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 Ventiv 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.

62
<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. Ventiv's by-laws provide that Ventiv 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
Ventiv 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, Ventiv's certificate of
incorporation also limits the liability of directors of Ventiv 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 Ventiv 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 Ventiv or to any liabilities imposed under federal securities law.

Indemnification and Insurance

Ventiv intends to obtain directors' and officers' insurance providing
indemnification for certain of Ventiv's directors, officers, affiliates,
partners and employees for certain liabilities.

Ventiv's by-laws, among other things, indemnify Ventiv'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 Ventiv, arising out of
such person's services as a director or executive officer of Ventiv, any
subsidiary of Ventiv or any other company or enterprise to which the person
provides services at the request of Ventiv. 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 Ventiv 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.

63
<PAGE>

ADDITIONAL INFORMATION

We have filed with the Securities and Exchange Commission the registration
statement under the Exchange Act with respect to Ventiv 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 document referred to herein and filed as an exhibit 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, Ventiv 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 Ventiv common stock on the Nasdaq National
Market and, if and when such shares of Ventiv 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 Ventiv have not authorized anyone to provide you with information that is
different.

64
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Ventiv Health, Inc.
This financial statement represents the financial position of the newly
formed subsidiary of Snyder Communications, Ventiv Health, Inc. Snyder
Communications intends to contribute its healthcare marketing services
business to this subsidiary and distribute it to Synder Communication's
stockholders through a special dividend of one share of common stock of
Ventiv Health, Inc. for every three shares of existing common stock of
Snyder Communications, Inc.
Report of Independent Public Accountants.................................. F-2
Balance Sheet as of June 30, 1999......................................... F-3
Ventiv Health
Combined Financial Statements
These combined financial statements present the financial position,
results of operations and cash flows of Snyder Communications, Inc.'s
healthcare marketing services business which Snyder Communications
intends to distribute to its common stockholders in the third quarter of
1999 through the special dividend described above.
Report of Independent Public Accountants.................................. F-4
Combined Balance Sheet as of December 31, 1998 and 1997 and June 30, 1999
(unaudited).............................................................. F-5
Combined Statement of Income for the years ended December 31, 1998, 1997
and 1996 and the six months ended June 30, 1999 (unaudited) and 1998
(unaudited).............................................................. F-6
Combined Statement of Cash Flows for the years ended December 31, 1998,
1997 and 1996 and the six months ended June 30, 1999 (unaudited) and 1998
(unaudited).............................................................. F-7
Notes to Combined Financial Statements.................................... F-8
CLI Pharma S.A.
Consolidated Financial Statements of Acquired Business
Report of Independent Public Accountants.................................. F-22
Consolidated Balance Sheet as of December 31, 1997........................ F-23
Consolidated Statement of Income for the year ended December 31, 1997..... F-24
Consolidated Statement of Equity for the year ended December 31, 1997..... F-25
Consolidated Statement of Cash Flows for the year ended December 31, 1997. F-26
Notes to Consolidated Financial Statements................................ F-27
</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 balance sheet of Ventiv Health, Inc.
("Ventiv"), as of June 30, 1999. This balance sheet is the responsibility of
Ventiv's management. Our responsibility is to express an opinion on this
balance sheet 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 balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheet. 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 balance sheet referred to above presents fairly, in all
material respects, the financial position of Ventiv as of June 30, 1999 in
conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Vienna, VA

August 23, 1999

F-2
<PAGE>

VENTIV HEALTH, INC.

BALANCE SHEET

AS OF JUNE 30, 1999

<TABLE>
<S> <C>
ASSETS
Cash .................................................................... $ 100
-----
Total Assets .......................................................... $ 100
=====
LIABILITIES AND STOCKHOLDER'S EQUITY
Total Liabilities ..................................................... $ --
Preferred stock, $.001 par value per share, 10,000 shares authorized,
none issued and outstanding at June 30, 1999 ........................... --
Common stock, $.001 par value per share, 50,000 shares authorized, 100
shares issued and outstanding at June 30, 1999 ......................... --
Additional paid-in capital............................................... 100
-----
Total Liabilities and Stockholder's Equity ............................ $ 100
=====
</TABLE>
- --------

(1) Ventiv Health, Inc. was created as a Delaware corporation on June 22, 1999
and had no operations other than matters relating to its organization and
registration. On June 22, 1999, Snyder Communications, Inc.'s ("Snyder")
Board of Directors approved a plan to effect 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 this newly formed
subsidiary, Ventiv Health, Inc., for every three shares of existing common
stock of Snyder.

(2) On June 23, 1999, Ventiv Health, Inc. issued 100 shares of common stock to
Snyder Communications, Inc. for $100.

F-3
<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 Ventiv Health
(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 the Company 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

Vienna, VA
June 22, 1999

F-4
<PAGE>

VENTIV HEALTH
(See Note 1)

COMBINED BALANCE SHEET
(in thousands)

<TABLE>
<CAPTION>
June 30, December 31,
----------- -----------------
1999 1998 1997
----------- -------- --------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents........................... $ 21,347 $ 25,664 $ 18,040
Marketable securities.......................... -- -- 1,108
Accounts receivable, net of allowance for
doubtful accounts of $2,645, $2,971 and $3,924
at June 30, 1999, December 31, 1998 and 1997,
respectively.................................. 55,812 43,521 29,331
Unbilled services.............................. 25,998 15,212 6,769
Current portion of deferred tax asset.......... -- 683 852
Other current assets........................... 9,871 10,369 7,141
-------- -------- --------
Total current assets......................... 113,028 95,449 63,241
-------- -------- --------
Property and equipment, net...................... 13,455 10,028 4,880
Goodwill and other intangible assets, net........ 96,103 80,728 26,283
Deferred tax asset............................... 4,822 3,414 4,569
Deposits and other assets........................ 687 4,025 1,974
-------- -------- --------
Total assets................................. $228,095 $193,644 $100,947
======== ======== ========
LIABILITIES AND INVESTMENTS
AND ADVANCES FROM SNYDER
Current liabilities:
Lines of credit................................ $ 76 $ 198 $ 22,875
Current maturities of long-term debt........... -- -- 137
Accrued payroll................................ 16,149 13,989 14,278
Accounts payable............................... 8,740 5,791 5,771
Accrued expenses............................... 30,785 40,613 29,225
Client advances................................ 4,944 1,965 --
Unearned revenue............................... 7,357 8,446 14,125
-------- -------- --------
Total current liabilities.................... 68,051 71,002 86,411
-------- -------- --------
Related party borrowings......................... -- -- 457
Long-term debt................................... 1,270 1,473 3,697
Other liabilities................................ 3 1,442 11
Commitments and contingencies
Investments and advances from Snyder............. 158,771 119,727 10,371
-------- -------- --------
Total liabilities and investments and
advances from Snyder........................ $228,095 $193,644 $100,947
======== ======== ========
</TABLE>

The accompanying notes are an integral part of this combined balance sheet.

F-5
<PAGE>

VENTIV HEALTH
(See Note 1)

COMBINED STATEMENT OF INCOME
(in thousands, except per share amounts)

<TABLE>
<CAPTION>
For the
Six Months Ended For the Years Ended
June 30, December 31,
------------------ ----------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues..................... $181,259 $151,313 $321,500 $208,967 $144,704
Operating expenses:
Cost of services........... 137,028 109,677 236,047 156,346 104,922
Selling, general and
administrative expenses... 21,585 19,929 43,029 32,787 25,960
Compensation to
stockholders.............. -- 515 742 15,638 12,340
Recapitalization costs..... -- -- -- 1,889 --
Acquisition and related
costs..................... 1,694 11,356 26,922 8,042 --
-------- -------- -------- -------- --------
Income (loss) from
operations.................. 20,952 9,836 14,760 (5,735) 1,482
Interest expense............. (123) (1,078) (2,315) (1,617) (691)
Investment income............ 373 655 1,850 568 796
-------- -------- -------- -------- --------
Income (loss) from operations
before income taxes......... 21,202 9,413 14,295 (6,784) 1,587
Income tax provision......... (8,563) (6,795) (12,849) (1,934) (1,504)
-------- -------- -------- -------- --------
Net income (loss)............ $ 12,639 $ 2,618 $ 1,446 $ (8,718) $ 83
======== ======== ======== ======== ========
Pro forma net income (loss)
per share data (unaudited):
Pro forma Historical net
income (loss) per share
(unaudited) (See Note 1)
Basic and diluted net
income (loss) per share... $ 0.52 $ 0.11 $ 0.06
======== ======== ========
Pro forma adjusted net
income (loss) per share
(unaudited) (See Notes 1
and 3)
Basic and diluted net
income (loss) per share... $ 0.52 $ 0.11 $ 0.06
======== ======== ========
Shares used in computing
net income (loss) per
share..................... 24,229 24,229 24,229
======== ======== ========
</TABLE>

The accompanying notes are an integral part of this combined statement of
income.

F-6
<PAGE>

VENTIV HEALTH
(See Note 1)

COMBINED STATEMENT OF CASH FLOWS
(in thousands)

<TABLE>
<CAPTION>
For the
Six Months For the Years Ended
Ended June 30, December 31,
---------------- -------------------------
1999 1998 1998 1997 1996
------- ------- ------- ------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activi-
ties:
Net income (loss)................ $12,639 $ 2,618 $ 1,446 $(8,718) $ 83
Adjustments to reconcile net
income (loss) to net cash
provided by (used in) operating
activities:
Depreciation and amortization.. 3,789 2,570 5,359 2,169 1,151
Noncash charge from accelerated
vesting of acquired subsidiary
options....................... -- 9 2,173 -- --
Deferred taxes................. 737 329 1,324 (3,914) (213)
(Gain) loss on disposal of
assets........................ 196 (118) 151 371 (168)
Other noncash amounts.......... -- 126 126 (934) (445)
Changes in assets and
liabilities:
Accounts receivable, net....... (11,014) (2,741) (1,040) (7,043) (573)
Unbilled services.............. (10,620) (1,342) (8,443) (3,074) (2,110)
Deposits and other assets...... 3,339 705 (3,533) (1,066) 238
Other current assets........... 756 (6,232) (813) 1,314 1,314
Accrued payroll, accounts
payable and accrued expenses.. (10,453) 9,291 8,599 16,385 4,896
Client advances................ 1,011 203 1,965 -- --
Unearned revenue............... (1,130) (3,041) (8,535) 2,586 (3,255)
------- ------- ------- ------- -------
Net cash provided by (used
in) operating activities.... (10,750) 2,377 (1,221) (1,924) 918
------- ------- ------- ------- -------
Cash flows from investing activi-
ties:
Cash on hand at acquired
businesses...................... 2,917 6,083 6,083 452 --
Purchase of subsidiaries......... (1,135) (9,585) (10,386) -- --
Purchase of property and
equipment....................... (4,775) (2,768) (4,916) (2,127) (915)
Proceeds from sale of equipment.. -- 780 780 184 246
Net sales (purchases) of
marketable securities........... -- 1,062 1,262 2,274 (159)
Purchase of license agreements... (151) (503) (13) (4,359) (871)
------- ------- ------- ------- -------
Net cash used in investing
activities.................. (3,144) (4,931) (7,190) (3,576) (1,699)
------- ------- ------- ------- -------
Cash flows from financing activi-
ties:
Net proceeds (repayment) of
long-term debt.................. (1,639) (3,767) (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................. (122) (2,385) (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.......................... 11,227 14,080 42,753 (167) (7,998)
------- ------- ------- ------- -------
Net cash provided by (used
in) financing activities.... 9,466 7,928 15,836 16,451 (8,756)
------- ------- ------- ------- -------
Effect of exchange rate changes... 111 7 199 (177) 76
Net increase (decrease)in cash and
equivalents...................... (4,317) 5,381 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........................... $21,347 $23,421 $25,664 $18,040 $ 7,266
======= ======= ======= ======= =======
Disclosure of supplemental cash
flow information:
Cash paid for interest........... $ 211 $ 404 $ 1,526 $ 899 $ 480
Cash paid for income taxes....... 6,141 1,867 2,542 1,550 244
Disclosure of noncash activities:
Businesses acquired with Snyder
stock........................... $16,336 $51,358 $64,546 $13,320 $ --
</TABLE>

The accompanying notes are an integral part of this combined statement of cash
flows.

F-7
<PAGE>

VENTIV HEALTH

NOTES TO COMBINED FINANCIAL STATEMENTS
(Information as of June 30, 1999 and for the six months ended June 30, 1999 and
June 30, 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 contribute its healthcare
marketing business in the third quarter of 1999 to a newly formed subsidiary,
Ventiv Health, Inc. Snyder intends to consummate the Distribution in the third
quarter of 1999 through a special dividend of one share of common stock of
Ventiv Health, Inc. for every three shares of existing common stock of Snyder.

Basis of Presentation

Subsequent to the Distribution, operations of Ventiv Health, 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 Snyder's healthcare marketing services business,
referred to herein as "Ventiv Health" or 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 Ventiv Health.

F-8
<PAGE>

VENTIV HEALTH

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 six months ended June 30, 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)........................................... 12,639
Comprehensive loss (unaudited)................................... (1,158)
Noncash transfers from Snyder (unaudited)........................ 16,336
Cash transfers from Snyder, net (unaudited)...................... 11,227
--------
Balance, June 30, 1999 (unaudited)................................. $158,771
========
</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.

The Company'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 the Company 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 the
Company's Contract Sales Group, and 3,183,281 were to companies in the
Company'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 Jones Sales Ltd. which was valued at $19.4
million including 425,478 shares issued in August 1997 and with the purchases
of Healthcare Promotions, LLC which was valued at $23.7 million including
584,951 shares issued and CLI Pharma S.A. which was valued at $30.7 million
including 576,078 shares issued 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 $16.3
million including 583,431 shares issued in March 1999.

F-9
<PAGE>

VENTIV HEALTH

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

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 the Company's largest clients utilize the services of more
than one of our operating groups.

The following details revenues and net income (loss) for each of the years
ended December 31, 1998, 1997 and 1996 as well as the six months ended June 30
, 1999 and June 30, 1998 of the Company and the Pooled Entities through the
dates of their respective Acquisitions:

<TABLE>
<CAPTION>
For the Six
Months Ended For the Years Ended
June 30, December 31,
----------------- ----------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
(in thousands)
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues:
The Company................... $181,259 $112,044 $270,323 $ 60,124 $ --
Pooled Entities............... -- 39,269 51,177 148,843 144,704
-------- -------- -------- -------- --------
$181,259 $151,313 $321,500 $208,967 $144,704
======== ======== ======== ======== ========
Net Income (loss):
The Company................... $ 12,639 $ 4,181 $ 5,933 $ 1,987 $ --
Pooled Entities............... -- (1,563) (4,487) (10,705) 83
-------- -------- -------- -------- --------
$ 12,639 $ 2,618 $ 1,446 $ (8,718) $ 83
======== ======== ======== ======== ========
</TABLE>

During 1999, the Company completed the acquisition of PromoTech Research
Associates, Inc. ("PromoTech") (March 25, 1999). The total consideration paid
was $16.3 million and consisted of 583,431 shares of Snyder common stock. This
purchase business combination has resulted in additional goodwill of $18.1
million. During 1998, the Company completed purchase business combinations,
including CLI Pharma S.A. ("CLI Pharma") (March 25, 1998) and Healthcare
Promotions, LLC ("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 Halliday Jones Ltd. ("HJ") (August 28, 1997), 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. This
purchase business combination has resulted in additional goodwill of $19.5
million. The following table presents pro forma financial information as if the
1999 purchase of PromoTech, 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 Six For the Years
Months Ended June Ended December
30, 31,
----------------- -----------------
1999 1998 1998 1997
-------- -------- -------- --------
(unaudited)
(in thousands, except per share
data)
<S> <C> <C> <C> <C>
Pro forma revenues..................... $183,186 $163,474 $335,628 $270,842
Pro forma net income (loss)............ 12,955 3,268 2,113 (8,759)
Pro forma basic and diluted net income
(loss) per share...................... 0.53 0.13 0.09
</TABLE>

The Company's other purchase business combinations are immaterial to the
combined financial statements.

F-10
<PAGE>

VENTIV HEALTH

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

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 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 August
26, 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 June 30, 1999 and the
combined statements of income and cash flows for the six months ended June 30,
1999 and June 30, 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 June 30, 1999 and the results of
operations and cash flows for the six months ended June 30, 1999 and
June 30, 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:

During the six months ended June 30, 1999, no one client represented more
than 10% of the Company's total revenue. The Company had two clients that
represented 13.9% 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

F-11
<PAGE>

VENTIV HEALTH

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
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 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.

F-12
<PAGE>

VENTIV HEALTH

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
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.

The table below presents this pro forma calculation of net income (loss):

<TABLE>
<CAPTION>
For the Six
Months For the Years
Ended June 30, 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................ $21,202 $ 9,413 $ 14,295 $ (6,784) $ 1,587
Pro forma provision for in-
come taxes.................. (8,563) (6,795) (12,849) (3,916) (4,316)
------- ------- -------- -------- -------
Pro forma adjusted net income
(loss)...................... $12,639 $ 2,618 $ 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

F-13
<PAGE>

VENTIV HEALTH

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

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 the cumulative amounts for foreign
currency translation adjustments and unrealized gains and losses on marketable
securities. The cumulative foreign currency translation adjustment was $(0.4)
million, $0.9 million and $0.2 million as of June 30, 1999, December 31, 1998
and 1997, respectively. There was no cumulative unrealized gain on marketable
securities as of June 30, 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.

F-14
<PAGE>

VENTIV HEALTH

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

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.

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>

F-15
<PAGE>

VENTIV HEALTH

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
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>

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, renewable on a monthly
basis ........................................................ $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,
terminated by the Company..................................... -- 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.

F-16
<PAGE>

VENTIV HEALTH

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
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>

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>

F-17
<PAGE>

VENTIV HEALTH

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

<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 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.

F-18
<PAGE>

VENTIV HEALTH

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

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 six months ended June 30, 1999, the Company recorded $1.7 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 six months ended June 30, 1999 consists of $1.3
million in severance and related costs associated with the termination of 23
employees, and $0.4 million in consulting services and other costs related to
these integration activities. As of June 30, 1999, 149 employees had
terminated employment with the Company and $9.0 million had been charged
against the total liability of $12.4 million.

During the six months ended June 30, 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.

The integration activities recorded in 1998 were recorded in accordance with
Emerging Issues Task Force 94-3, "Liability Recognition for Costs to Exit an
Activity (including certain costs incurred in a restructuring)" ("EITF 94-3").
Additional expenses for the Company's integration activities recorded in 1999
represent additional costs incurred that did not qualify for accrual at
December 31, 1998 in accordance with EITF 94-3.

The following table summarizes the activity in the integration activities
liability account:

<TABLE>
<CAPTION>
Beginning Deductions for Balance at End
Balance Additions Amounts Paid of Period
--------- --------- -------------- --------------
<S> <C> <C> <C> <C>
Year Ended December 31, 1998. -- 10,654 (2,683) 7,971
Six Months Ended June 30,
1999........................ 7,971 1,696 (6,439) 3,228
</TABLE>

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
employees, consultants and directors. Ventiv intends to grant options under
its stock incentive plan to Ventiv employees whose existing Snyder
Communications options are terminated as a consequence of the distribution.

On the date of the Distribution, the Company will issue shares of restricted
stock of Ventiv Health, 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.

F-19
<PAGE>

VENTIV HEALTH

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

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-20
<PAGE>

VENTIV HEALTH

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).............. (0.17) 0.28 (0.16) 0.11 0.06
Pro forma adjusted net
income (loss).......... (4,052) 6,670 (3,771) 2,599 1,446
Pro forma adjusted net
income (loss) per share
(diluted).............. (0.17) 0.28 (0.16) 0.11 0.06
<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 adjusted net
income (loss).......... (302) 2,281 (10,269) (2,410) (10,700)
</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.

17. Subsequent Event to June 30, 1999 Financial Statements (unaudited):

In August 1999, Snyder Communications agreed to provide incremental
consideration for the acquisition of PromoTech Research Associates based on the
average trading price of SNC stock, circle.com stock, and Ventiv Health, Inc.
stock for the twenty trading days ending on October 15, 1999 (or such lesser
number of days that a public market exists for the securities up to October 15,
1999). Based on the closing price of the Snyder Communications stock on August
28, 1999, the amount of such payment would result in non-cash expense of
approximately $4.3 million, payable in Ventiv Health, Inc. common stock.

F-21
<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 U.S. 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 the accounting principles
generally accepted in the United States.

ARTHUR ANDERSEN LLP

Neuilly-sur-Seine, France
June 21, 1999

F-22
<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-23
<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-24
<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-25
<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-26
<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-27
<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-28
<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-29
<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 Ventiv Health (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

Vienna, VA
June 22, 1999

S-1
<PAGE>

VENTIV HEALTH

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 Balance at
Beginning Deductions for Translation End of
of Year Additions Amounts Paid 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>
<C> <S>
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) (the "Registrant's Form S-1")).*
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).
10.2 Professional Services Agreement, dated February 1996, as amended, between
the Company and AT&T Communications Inc. (filed as Exhibit 10.2 of the
Registrant's Form S-1).*
10.3 Services Agreement between the Company and U.S. News & World Report, L.P.
(filed as Exhibit 10.4 of the Registrant's Form S-1).*
10.4 Registration Rights Agreement, dated September 4, 1996, between the
Company and Daniel M. Snyder, Michele D. Snyder, USN College Marketing,
L.P. and each of the 1995 Investors (as defined therein) (filed as
Exhibit 10.5 of the Registrant's Form S-1).*
10.5 Lease Agreement, Democracy Center, Bethesda, Maryland, dated March 19,
1996, as amended, between the Company and Democracy Associates Limited
Partnership (filed as Exhibit 10.6 of the Registrant's on Form S-1).*
10.6 Employment Agreement between the Company and Daniel M. Snyder
(Registrant's Exhibit 10.7 of the Registrant's Form S-1).*
10.7 Employment Agreement between the Company and Michele D. Snyder
(Incorporated by reference to Exhibit 10.8 forming a part of Amendment
No. 1 to the Company's Registration Statement of Form S-1 (File No. 333-
7495) filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended).*
10.8 Employment Agreement between the Company and A. Clayton Perfall (filed as
Exhibit 10.8 of the Registrant's Registration Statement on Form S-1 (File
No. 333-33691)).*
10.9 Credit Agreement, dated as of August 27, 1999, among the Registrant,
certain subsidiaries and affiliates of the Registrant, the lenders named
therein, Bank of America, N.A., The First National Bank of Chicago and
Banc of America Securities LLC.
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 Power of Attorney.**
27.1 Financial Data Schedule.**
99.1 Form of Proxy.**
</TABLE>
- --------
* Incorporated by reference.
** Previously filed.

II-2
<PAGE>

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.

(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.

II-3
<PAGE>

(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-4
<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 1st day of September 1999.

SNYDER COMMUNICATIONS, INC.

/s/ Daniel M. Snyder
By:__________________________________
Daniel M. Snyder
Chairman of the Board of Directors
and Chief
Executive Officer

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 September 1,
- ------------------------------------- Board of Directors 1999
(Daniel M. Snyder) and Chief Executive
Officer

/s/ Michele D. Snyder Vice Chairman, September 1,
- ------------------------------------- President, Chief 1999
(Michele D. Snyder) Operating Officer
and Director

/s/ A. Clayton Perfall Chief Financial September 1,
- ------------------------------------- Officer and 1999
(A. Clayton Perfall) Secretary

* Chief Accounting September 1,
- ------------------------------------- Officer and 1999
(David B. Pauken) Secretary

* Director September 1,
- ------------------------------------- 1999
(Mortimer B. Zuckerman)

* Director September 1,
- ------------------------------------- 1999
(Fred Drasner)

* Director September 1,
- ------------------------------------- 1999
(Philip Guarascio)

* Director September 1,
- ------------------------------------- 1999
(Mark E. Jennings)

/s/ A. Clayton Perfall
By__________________________________:
A. Clayton Perfall
(Attorney-in-fact)

</TABLE>

II-5
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
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) (the "Registrant's Form S-1")).*
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).
10.2 Professional Services Agreement, dated February 1996, as amended,
between the Company and AT&T Communications Inc. (filed as Exhibit
10.2 of the Registrant's Form S-1).*
10.3 Services Agreement between the Company and U.S. News & World Report,
L.P. (filed as Exhibit 10.4 of the Registrant's Form S-1).*
10.4 Registration Rights Agreement, dated September 4, 1996, between the
Company and Daniel M. Snyder, Michele D. Snyder, USN College
Marketing, L.P. and each of the 1995 Investors (as defined therein)
(filed as Exhibit 10.5 of the Registrant's Form S-1).*
10.5 Lease Agreement, Democracy Center, Bethesda, Maryland, dated March 19,
1996, as amended, between the Company and Democracy Associates Limited
Partnership (filed as Exhibit 10.6 of the Registrant's on Form S-1).*
10.6 Employment Agreement between the Company and Daniel M. Snyder
(Registrant's Exhibit 10.7 of the Registrant's Form S-1).*
10.7 Employment Agreement between the Company and Michele D. Snyder
(Incorporated by reference to Exhibit 10.8 forming a part of Amendment
No. 1 to the Company's Registration Statement of Form S-1 (File No.
333-7495) filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended).*
10.8 Employment Agreement between the Company and A. Clayton Perfall (filed
as Exhibit 10.8 of the Registrant's Registration Statement on Form S-1
(File No. 333-33691)).*
10.9 Credit Agreement, dated as of August 27, 1999, among the Registrant,
certain subsidiaries and affiliates of the Registrant, the lenders
named therein, Bank of America, N.A., The First National Bank of
Chicago and Banc of America Securities LLC.
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.**
27.1 Financial Data Schedule.**
99.1 Form of Proxy.**
</TABLE>
- --------
* Incorporated by reference.
** Previously filed.

<PAGE>

Exhibit 8.1
September 1, 1999

Snyder Communications, Inc.
Two Democracy Center
6903 Rockledge Drive, 15th Floor
Bethesda, Maryland 20817

Ladies and Gentlemen:

You have requested our opinion regarding the material federal income
tax consequences of the issuance by Snyder Communications, Inc. ("Snyder"), and
the receipt by its stockholders, of SNC stock and circle.com stock pursuant to
the proposed adoption of an amended and restated certificate of incorporation of
Snyder.

In formulating our opinion, we have examined such documents as we have
deemed appropriate, including (i) the Registration Statement on Form S-4
(Registration No. 333-81749), as filed with the Securities and Exchange
Commission on June 28, 1999 and amended to the date hereof (the "Registration
Statement") under the Securities Act of 1933, as amended, and (ii) the proxy
statement and prospectus (the "Prospectus") contained in the Registration
Statement. All terms not otherwise defined herein shall have the same meaning
ascribed thereto in the Prospectus.

In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to original documents of documents submitted to us as certified or
photostatic copies, the authenticity of the originals of such latter documents,
and that the final form of any documents currently in draft form will be
substantially the same as the drafts we reviewed. We have also obtained such
additional information and have made such inquiries of such officers and
representatives of Snyder as we have deemed relevant and necessary as a basis
for the opinion hereinafter set forth.
<PAGE>

Snyder Communications, Inc.
September 1, 1999
Page 2

Our opinion set forth below further assumes (1) that the statements
and facts concerning Snyder set forth in the Registration Statement are
accurate, (2) that the proposed adoption of the amended and restated certificate
of incorporation of Snyder will be consummated in the manner contemplated by,
and in accordance with the terms set forth in, the Prospectus and (3) that the
characteristics, terms and conditions of the SNC stock and the circle.com stock
will be the same in all material respects as those set forth in the Amended and
Restated Certificate of Incorporation of Snyder attached as Annex A to the
Registration Statement.

Based on the foregoing, it is our opinion that (i) for federal income
tax purposes, neither the issuance nor receipt of SNC stock and circle.com stock
pursuant to the adoption of the amended and restated certificate of
incorporation of Snyder should be taxable events to Snyder or its stockholders,
except with respect to cash received in lieu of a fractional share of circle.com
and (ii) the statements contained in the Prospectus under the captions "Material
Federal Income Tax Consequences," insofar as such statements constitute matters
of law or legal conclusions and except to the extent qualified therein, are
accurate in all material respects.

We wish to point out that because there are no federal income tax
regulations, court decisions, or published Internal Revenue Service rulings
bearing directly on the recapitalization proposal, and in view of the
administrative position that the Internal Revenue Service has taken with respect
to issuances of stock such as the SNC stock and circle.com stock, the tax
consequences of the recapitalization proposal are not free from doubt and
therefore we are unable to render an unqualified opinion.

The foregoing opinion is based on current provisions of the Internal
Revenue Code of 1986, as amended, the Treasury Regulations promulgated
thereunder (including proposed Treasury Regulations), published pronouncements
of the Internal Revenue Service and case law, any of which may be changed at any
time, possibly with retroactive effect. We express no opinion as to any matters
not specifically covered by the foregoing opinion and caution that any change in
applicable law or facts and circumstances surrounding the recapitalization
proposal or any inaccuracy in the documents, statements or facts on which we
have relied may affect the validity of this opinion.
<PAGE>

Snyder Communications, Inc.
September 1, 1999
Page 3

We consent to the references to our firm under the captions "Material
Federal Income Tax Consequences" in the Prospectus and to the filing of this
opinion as an exhibit to the Registration Statement. This opinion may not be
used for any other purpose and may not otherwise be relied upon by, or disclosed
to, any other person, referred to or quoted.

Very truly yours,

WEIL, GOTSHAL & MANGES LLP

<PAGE>

Exhibit 10.9

CREDIT AGREEMENT

Dated as of August 27, 1999

among

SNYDER COMMUNICATIONS, INC.,
as Borrower,

CERTAIN SUBSIDIARIES OF THE BORROWER,
as Guarantors,

THE LENDERS NAMED HEREIN

AND

BANK OF AMERICA, N.A.,
as Administrative Agent

THE FIRST NATIONAL BANK OF CHICAGO,
as Syndication Agent

BANKERS TRUST COMPANY,
as Documentation Agent

Arranged by:

BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager
<PAGE>

TABLE OF CONTENTS
Page

SECTION 1 DEFINITIONS.........................................................1
1.1 Definitions......................................................1
-----------
1.2 Computation of Time Periods.....................................24
---------------------------
1.3 Accounting Terms................................................24
----------------
SECTION 2 CREDIT FACILITIES.................................................25
2.1 Commitments.....................................................25
-----------
2.2 Method of Borrowing.............................................26
-------------------
2.3 Interest........................................................27
--------
2.4 Repayment.......................................................27
---------
2.5 Notes...........................................................28
-----
2.6 Additional Provisions relating to Letters of Credit.............28
---------------------------------------------------
2.7 Additional Provisions relating to Swingline Loans...............32
-------------------------------------------------
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES....................33
----------------------------------------------
3.1 Default Rate....................................................33
------------
3.2 Extension and Conversion........................................33
------------------------
3.3 Prepayments.....................................................34
-----------
3.4 Reduction and Termination of Commitments........................34
----------------------------------------
3.5 Fees............................................................35
----
3.6 Capital Adequacy................................................36
----------------
3.7 Limitation on Eurodollar Loans..................................36
------------------------------
3.8 Illegality......................................................36
----------
3.9 Requirements of Law.............................................37
-------------------
3.10 Treatment of Affected Loans....................................38
---------------------------
3.11 Taxes..........................................................38
-----
3.12 Compensation...................................................40
------------
3.13 Pro Rata Treatment.............................................41
------------------
3.14 Sharing of Payments............................................42
-------------------
3.15 Payments, Computations, Etc....................................42
---------------------------
3.16 Evidence of Debt...............................................44
----------------
3.17 Certain Limitations............................................44
-------------------
SECTION 4 GUARANTY..........................................................45
--------
4.1 The Guaranty....................................................45
------------
4.2 Obligations Unconditional.......................................46
-------------------------
4.3 Reinstatement...................................................47
-------------
4.4 Certain Additional Waivers......................................47
--------------------------
4.5 Remedies........................................................47
--------
4.6 Rights of Contribution..........................................48
----------------------
4.7 Guarantee of Payment; Continuing Guarantee......................49
------------------------------------------
SECTION 5 CONDITIONS........................................................49
----------
5.1 Closing Conditions..............................................49
------------------
5.2 Conditions to all Extensions of Credit..........................51
--------------------------------------
SECTION 6 REPRESENTATIONS AND WARRANTIES....................................52
------------------------------
6.1 Financial Condition.............................................52
-------------------
6.2 No Changes or Restricted Payments...............................52
---------------------------------

i
<PAGE>

6.3 Organization; Existence; Compliance with Law....................53
--------------------------------------------
6.4 Power; Authorization; Enforceable Obligations...................53
---------------------------------------------
6.5 No Legal Bar....................................................53
------------
6.6 No Material Litigation and Disputes.............................54
-----------------------------------
6.7 No Defaults.....................................................54
-----------
6.8 Ownership and Operation of Property.............................54
-----------------------------------
6.9 Intellectual Property...........................................55
---------------------
6.10 No Burdensome Restrictions.....................................55
--------------------------
6.11 Taxes..........................................................55
-----
6.12 ERISA..........................................................55
-----
6.13 Governmental Regulations, Etc..................................56
-----------------------------
6.14 Subsidiaries...................................................57
------------
6.15 Purpose of Extensions of Credit................................57
-------------------------------
6.16 Environmental Matters..........................................57
---------------------
6.17 Year 2000 Compliance...........................................58
--------------------
6.18 No Material Misstatements......................................59
-------------------------
6.19 Labor Matters..................................................59
-------------
6.20 Solvency.......................................................59
--------
6.21 No Other Broker's Fees.........................................60
----------------------
SECTION 7 AFFIRMATIVE COVENANTS.............................................60
---------------------
7.1 Information Covenants...........................................60
---------------------
7.2 Preservation of Existence and Franchises........................63
----------------------------------------
7.3 Books and Records...............................................63
-----------------
7.4 Compliance with Law.............................................64
-------------------
7.5 Payment of Taxes and Other Indebtedness.........................64
---------------------------------------
7.6 Insurance.......................................................64
---------
7.7 Maintenance of Property.........................................64
-----------------------
7.8 Performance of Obligations......................................64
--------------------------
7.9 Use of Proceeds.................................................64
---------------
7.10 Audits/Inspections.............................................65
------------------
7.11 Financial Covenants............................................65
-------------------
7.12 Additional Guarantors..........................................65
---------------------
7.13 Year 2000 Compliance...........................................66
--------------------
SECTION 8 NEGATIVE COVENANTS................................................66
------------------
8.1 Indebtedness....................................................66
------------
8.2 Liens...........................................................67
-----
8.3 Nature of Business..............................................67
------------------
8.4 Merger and Consolidation, Dissolution and Acquisitions..........68
------------------------------------------------------
8.5 Asset Dispositions..............................................68
------------------
8.6 Investments.....................................................69
-----------
8.7 Restricted Payments.............................................69
-------------------
8.8 Modifications and Payments in respect of Other Funded Debt......69
----------------------------------------------------------
8.9 Transactions with Affiliates....................................70
----------------------------
8.10 Fiscal Year; Organizational Documents..........................70
-------------------------------------
8.11 Sale Leasebacks................................................70
---------------
SECTION 9 EVENTS OF DEFAULT.................................................71
-----------------

ii
<PAGE>

9.1 Events of Default...............................................71
-----------------
9.2 Acceleration; Remedies..........................................73
----------------------
SECTION 10 AGENCY PROVISIONS................................................74
-----------------
10.1 Appointment, Powers and Immunities.............................74
----------------------------------
10.2 Reliance by Administrative Agent...............................75
--------------------------------
10.3 Defaults.......................................................75
--------
10.4 Rights as a Lender.............................................75
------------------
10.5 Indemnification................................................76
---------------
10.6 Non-Reliance on Administrative Agent and Other Lenders.........76
------------------------------------------------------
10.7 Successor Administrative Agent.................................77
------------------------------
SECTION 11 MISCELLANEOUS....................................................77
-------------
11.1 Notices........................................................77
-------
11.2 Right of Set-Off; Adjustments..................................79
-----------------------------
11.3 Benefit of Agreement...........................................79
--------------------
11.4 No Waiver; Remedies Cumulative.................................81
------------------------------
11.5 Expenses; Indemnification......................................81
-------------------------
11.6 Amendments, Waivers and Consents...............................82
--------------------------------
11.7 Counterparts...................................................84
------------
11.8 Headings.......................................................84
--------
11.9 Survival.......................................................84
--------
11.10 Governing Law; Submission to Jurisdiction; Venue..............84
------------------------------------------------
11.11 Severability..................................................85
------------
11.12 Entirety......................................................85
--------
11.13 Binding Effect; Termination...................................85
---------------------------
11.14 Confidentiality...............................................85
---------------
11.15 Source of Funds...............................................86
---------------
11.16 Conflict......................................................87
--------

iii
<PAGE>

SCHEDULES
---------

Schedule 2.1 Lenders and Commitments
Schedule 2.2(a)(i) Form of Notice of Borrowing
Schedule 2.2(a)(ii) Form of Notice of Request of Letter of Credit
Schedule 2.5 Form of Revolving Note
Schedule 2.6(b) Existing Letters of Credit
Schedule 3.2 Form of Notice of Extension/Conversion
Schedule 5.1(e)(v) Form of Officer's Certificate
Schedule 6.6 Litigation
Schedule 6.8 Liens
Schedule 6.14 Subsidiaries
Schedule 6.19 Labor Matters
Schedule 7.1(c) Form of Officer's Compliance Certificate
Schedule 7.12 Form of Joinder Agreement
Schedule 8.1 Indebtedness
Schedule 8.6 Investments
Schedule 11.1 Lenders' Addresses
Schedule 11.3(b) Form of Assignment and Acceptance

iv
<PAGE>

CREDIT AGREEMENT

THIS CREDIT AGREEMENT, dated as of August 27, 1999 (the "Credit
------
Agreement"), is by and among SNYDER COMMUNICATIONS, INC., a Delaware corporation
- ---------
(the "Borrower"), the Subsidiaries of the Borrower identified as Guarantors on
--------
the signature pages hereto and such other Subsidiaries of the Borrower as may
from time to time become Guarantors hereunder in accordance with the provisions
hereof (the "Guarantors"), the lenders named herein and such other lenders as
----------
may become a party hereto (the "Lenders"), BANK OF AMERICA, N.A., as
-------
Administrative Agent for the Lenders (in such capacity, the "Administrative
--------------
Agent"), and THE FIRST NATIONAL BANK OF CHICAGO, as Syndication Agent.
- -----

WITNESSETH

WHEREAS, the Borrower has requested that the Lenders provide $195 million
in credit facilities for the purposes hereinafter set forth; and

WHEREAS, the Lenders have agreed to make the requested credit facilities
available to the Borrower on the terms and conditions hereinafter set forth;

NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

SECTION 1

DEFINITIONS
-----------

1.1 Definitions.
-----------

As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:

"Acquisition", by any Person, means the purchase or acquisition by such
-----------
Person of any Capital Stock of another Person other than a member of the
Consolidated Group or all or any substantial portion of the Property (other
than Capital Stock) of another Person other than a member of the
Consolidated Group, whether or not involving a merger or consolidation with
such other Person.

"Adjusted Base Rate" means the Base Rate plus the Applicable Percentage.
------------------ ----

"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the Applicable
------------------------ ----
Percentage.
<PAGE>

"Administrative Agent" shall have the meaning assigned to such term in
--------------------
the heading hereof, together with any successors or assigns.

"Administrative Agent's Fee Letter" means that certain letter agreement,
---------------------------------
dated as of July 19, 1999, between the Administrative Agent and the
Borrower, as amended, modified, restated or supplemented from time to time.

"Administrative Agent's Fees" shall have the meaning assigned to such
---------------------------
term in Section 3.5(c).

"Affiliate" means, with respect to any Person, any other Person (i)
---------
directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person or (ii) directly or indirectly
owning or holding ten percent (10%) or more of the Capital Stock in such
Person. For purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.

"Agency Services Address" means the notice address for the
-----------------------
Administrative Agent set forth in Section 11.1 or such other address as may
be identified by written notice from the Administrative Agent to the
Borrower.

"Aggregate Revolving Committed Amount" shall have the meaning assigned
------------------------------------
to such term in Section 2.1(a).

"Applicable Lending Office" means, for each Lender, the office of such
-------------------------
Lender (or of an affiliate of such Lender) as such Lender may from time to
time specify to the Administrative Agent and the Borrower by written notice
as the office by which its Eurodollar Loans are made and maintained.

"Applicable Percentage" means for any day, the rate per annum set forth
---------------------
below opposite the applicable Consolidated Total Leverage Ratio then in
effect, it being understood that the Applicable Percentage for (i) Base
Rate Loans shall be the percentage set forth under the column "Base Rate
Margin", (ii) Eurodollar Loans shall be the percentage set forth under the
column "Eurodollar Margin and Standby Letter of Credit Fee", (iii) the
Standby Letter of Credit Fee shall be the percentage set forth under the
column "Eurodollar Margin and Standby Letter of Credit Fee" and (iv) the
Commitment Fee shall be the percentage set forth under the column
"Commitment Fee":

<TABLE>
<CAPTION>
Consolidated Total Eurodollar Margin
Pricing Leverage Base Rate and Commitment
Level Ratio Margin Standby Letter of Credit Fee Fee
----- ----- ------ ---------------------------- ---
<S> <C> <C> <C> <C>
I Greater than or equal to 2.0 0.25% 1.875% 0.35%
II Less than 2.0 but Greater than or equal to 1.5 0.00% 1.625% 0.30%
III Less than 1.5 but Greater than or equal to 1.0 0.00% 1.375% 0.30%
</TABLE>

2
<PAGE>

<TABLE>
<S> <C> <C> <C> <C>
IV Less than 1.0 but Greater than or equal to 0.5 0.00% 1.125% 0.30%
V Less than 0.5 0.00% 0.875% 0.25%
</TABLE>

The Applicable Percentage shall be determined and adjusted quarterly on the
date (each a "Rate Determination Date") five (5) Business Days after the
-----------------------
date by which the annual and quarterly compliance certificates and related
financial statements and information are required in accordance with the
provisions of Sections 7.1(a), (b) and (c), as appropriate; provided that:
--------

(i) the initial Applicable Percentages shall be based on the
financial statements and related financial information for the most
recent fiscal quarter ending prior to the Closing Date, and

(ii) notwithstanding the foregoing, in the event an annual or
quarterly compliance certificate and related financial statements and
information are not delivered timely to the Agency Services Address by
the date required by Sections 7.1(a), (b) or (c), as appropriate, the
Applicable Percentages shall be based on pricing level I until such
time as an appropriate compliance certificate and related financial
statements and information are delivered, whereupon the applicable
pricing level shall be adjusted based on the information contained in
such compliance certificate and related financial statements and
information.

Subject to the qualifications set forth above, each Applicable Percentage
shall be effective from a Rate Determination Date until the next such Rate
Determination Date. The Administrative Agent shall determine the
appropriate Applicable Percentages in the pricing matrix promptly upon
receipt of the quarterly or annual compliance certificate and related
financial information and shall promptly notify the Borrower and the
Lenders of any change thereof. Such determinations by the Administrative
Agent shall be conclusive absent manifest error. Adjustments in the
Applicable Percentages shall be effective as to existing Extensions of
Credit as well as new Extensions of Credit made thereafter.

"Asset Disposition" shall mean and include the sale, lease or other
-----------------
disposition of any Property by any member of the Consolidated Group
(including the Capital Stock of a Subsidiary other than (A) the sale of
inventory in the ordinary course of business, (B) the sale, lease or other
disposition of machinery and equipment no longer used or useful in the
conduct of such member's business and (C) a sale, lease, transfer or
disposition of Property to a Domestic Credit Party.

"Bank of America" means Bank of America, N.A., and its successors.
---------------

"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
---------------
States Code, as amended, modified, succeeded or replaced from time to time.

"Bankruptcy Event" means, with respect to any Person, the occurrence
----------------
of any of the following with respect to such Person: (i) a court or
governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of such Person

3
<PAGE>

in an involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
ordering the winding up or liquidation of its affairs; or (ii) there shall
be commenced against such Person an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
any case, proceeding or other action for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or for
the winding up or liquidation of its affairs, and such involuntary case or
other case, proceeding or other action shall remain undismissed,
undischarged or unbonded for a period of sixty (60) consecutive days; or
(iii) such Person shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under
any such law, or consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of such Person or for any substantial part of its
Property or make any general assignment for the benefit of creditors; or
(iv) such Person shall be unable to, or shall admit in writing its
inability to, pay its debts generally as they become due.

"Base Rate" means, for any day, the rate per annum equal to the
---------
higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (0.5%) and (b) the Prime Rate for such day. Any change in the Base
Rate due to a change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or Federal
Funds Rate.

"Base Rate Loan" means any Loan bearing interest at a rate
--------------
determined by reference to the Base Rate.

"Borrower" means Snyder Communications, Inc., a Delaware corporation,
--------
as referenced in the opening paragraph, its successors and permitted
assigns.

"Business Day" means a day other than a Saturday, Sunday or other
------------
day on which commercial banks in Charlotte, North Carolina or New York, New
York are authorized or required by law to close, except that, when used in
------ ----
connection with a Eurodollar Loan, such day shall also be a day on which
dealings between banks are carried on in Dollar deposits in London,
England.

"Capital Lease" means, as applied to any Person, any lease of any
-------------
Property by that Person as lessee which, in accordance with GAAP, is or
should be accounted for as a capital lease on the balance sheet of that
Person.

"Capital Stock" means (i) in the case of a corporation, capital
-------------
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership,
partnership interests (whether general or limited), (iv) in the case of a
limited liability company, membership interests and (v) any other interest
or participation that

4
<PAGE>

confers on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, the issuing Person.

"Cash Equivalents" means (a) securities issued or directly and fully
----------------
guaranteed or insured by the United States or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is
pledged in support thereof) having maturities of not more than twelve
months from the date of acquisition, (b) Dollar denominated time deposits
and certificates of deposit of (i) any Lender, (ii) any domestic commercial
bank of recognized standing having capital and surplus in excess of
$500,000,000 or (iii) any bank whose short-term commercial paper rating
from S&P is at least A-1 or the equivalent thereof or from Moody's is at
least P-1 or the equivalent thereof (any such bank being an "Approved
--------
Bank"), in each case with maturities of not more than 270 days from the
date of acquisition, (c) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any
variable rate notes issued by, or guaranteed by, any domestic corporation
rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the
equivalent thereof) or better by Moody's and maturing within six months of
the date of acquisition, (d) repurchase agreements entered into by any
Person with a bank or trust company (including any of the Lenders) or
recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the
United States in which such Person shall have a perfected first priority
security interest (subject to no other Liens) and having, on the date of
purchase thereof, a fair market value of at least 100% of the amount of the
repurchase obligations and (e) Investments, classified in accordance with
GAAP as current assets, in money market investment programs registered
under the Investment Company Act of 1940, as amended, which are
administered by reputable financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of the
character described in the foregoing subdivisions (a) through (d).

"Change of Control" means the occurrence of any of the following
-----------------
events: (i) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership, directly or indirectly, of, or shall have
acquired by contract or otherwise, or shall have entered into a contract or
other agreement that, upon consummation, will result in its or their
acquisition of or control over (other than any such contract or other
agreement which requires the consent of the Lenders hereunder as a
condition precedent to the consummation of such acquisition of or control
over), Voting Stock of the Borrower (or other securities convertible into
such Voting Stock) representing 35% or more of the combined voting power of
all Voting Stock of the Borrower or (ii) during any period of up to 24
consecutive months, commencing after the Closing Date, individuals who at
the beginning of such 24 month period were directors of the Borrower
(together with any new director whose election by the Borrower's board of
directors or whose nomination for election by the Borrower's shareholders
was approved by a vote of at least a majority of the directors then still
in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the directors of the Borrower
then in office. As used herein, "beneficial ownership" shall have the
meaning provided in Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act.

5
<PAGE>

"Closing Date" means the date hereof.
------------

"Commitment Fee" shall have the meaning assigned to such term in
--------------
Section 3.5(a).

"Commitments" means any of the Revolving Commitments, the LOC
-----------
Commitments and/or the Swingline Commitments.

"Commitment Period" means the period from and including the Closing
-----------------
Date to but not including the earlier of (i) the Termination Date or (ii)
the date on which the Commitments terminate in accordance with the
provisions of this Credit Agreement.

"Committed Amount" means any of the Revolving Committed Amount, the
----------------
LOC Committed Amount and/or the Swingline Committed Amount.

"Consolidated Capital Expenditures" means, for any period for the
---------------------------------
Consolidated Group, without duplication, all expenditures (whether paid in
cash or other consideration) during such period that, in accordance with
GAAP, are or should be included in additions to property, plant and
equipment or similar items reflected in the consolidated statement of cash
flows for such period; provided, that Consolidated Capital Expenditures
--------
shall not include, for purposes hereof, expenditures of proceeds of
insurance settlements, condemnation awards and other settlements in respect
of lost, destroyed, damaged or condemned assets, equipment or other
property to the extent such expenditures are made to replace or repair such
lost, destroyed, damaged or condemned assets, equipment or other property
or otherwise to acquire assets or properties useful in the business of the
members of the Consolidated Group.

"Consolidated EBITDA" means, for any period for the Consolidated
-------------------
Group, the sum of (i) Consolidated Net Income for such period plus (ii)
----
to the extent deducted in determining net income for such period, (A)
Consolidated Interest Expense, (B) taxes and (C) depreciation and
amortization, in each case on a consolidated basis determined in accordance
with GAAP. Except as otherwise expressly provided, the applicable period
shall be for the four consecutive fiscal quarters ending as of the date of
determination.

"Consolidated Group" means the Borrower and its consolidated
------------------
subsidiaries, as determined in accordance with GAAP.

"Consolidated Interest Coverage Ratio" means, as of the last day of
------------------------------------
each fiscal quarter, the ratio of Consolidated EBITDA for the period of
four consecutive fiscal quarters ending as of such day to Consolidated
Interest Expense for the period of four consecutive fiscal quarters ending
as of such day.

"Consolidated Interest Expense" means, for any period for the
-----------------------------
Consolidated Group, all interest expense, including the amortization of
debt discount and premium, the interest component under Capital Leases and
the implied interest component under

6
<PAGE>

Securitization Transactions, in each case on a consolidated basis determined in
accordance with GAAP applied on a consolidated basis. Except as expressly
provided otherwise, the applicable period shall be for the four consecutive
fiscal quarters ending as of the date of determination.

"Consolidated Net Income" means, for any period for the Consolidated Group,
-----------------------
net income (or loss) determined on a consolidated basis in accordance with GAAP,
but (a) excluding for purposes of determining the Consolidated Total Leverage
Ratio and Consolidated Interest Coverage Ratio (i) non-recurring, non-cash
charges associated with Permitted Acquisitions, Acquisitions consummated prior
to the Closing Date, restructurings, reorganizations, spin-offs and
restructuring and integration costs, and (ii) any extraordinary gains or losses
and related tax effects thereon, and (b) including for purposes of determining
the Consolidated Total Leverage Ratio and Consolidated Interest Coverage Ratio
the cash portion of non-cash charges in a previous period. Except as otherwise
expressly provided, the applicable period shall be for the four consecutive
fiscal quarters ending as of the date of determination.

"Consolidated Net Worth" means, as of any date for the Consolidated Group,
----------------------
consolidated shareholder's equity or net worth as determined in accordance with
GAAP.

"Consolidated Total Funded Debt" means Funded Debt of the Consolidated
------------------------------
Group determined on a consolidated basis in accordance with GAAP.

"Consolidated Total Leverage Ratio" means, as of the last day of each
---------------------------------
fiscal quarter, the ratio of Consolidated Total Funded Debt on such day to
Consolidated EBITDA for the period of four consecutive fiscal quarters ending as
of such day.

"Continue", "Continuation", and "Continued" shall refer to the continuation
-------- ------------ ---------
pursuant to Section 3.2 hereof of a Eurodollar Loan from one Interest Period to
the next Interest Period.

"Contractual Obligation" means, as to any Person, any provision of any
----------------------
security issued by such Person or of any material agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.

"Convert", "Conversion", and "Converted" shall refer to a conversion
------- ---------- ---------
pursuant to Section 3.2 or Sections 3.7 through 3.12, inclusive, of a Base
Rate Loan into a Eurodollar Loan.

"Credit Documents" means a collective reference to this Credit Agreement,
----------------
the Notes, the LOC Documents, each Joinder Agreement, the Administrative Agent's
Fee Letter and all other related agreements and documents issued or delivered
hereunder or thereunder or pursuant hereto or thereto (in each case as the same
may be amended, modified, restated, supplemented, extended, renewed or replaced
from time to time), and "Credit Document" means any one of them.
---------------

7
<PAGE>

"Credit Parties" means a collective reference to the Borrower and the
--------------
Guarantors, and "Credit Party" means any one of them.
------------

"Default" means any event, act or condition which with notice or lapse of
-------
time, or both, would constitute an Event of Default.

"Defaulting Lender" means, at any time, any Lender that (a) has failed to
-----------------
make a Loan or purchase a Participation Interest required pursuant to the terms
of this Credit Agreement within one Business Day of when due, (b) other than as
set forth in (a) above, has failed to pay to the Administrative Agent or any
Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement within one Business Day of when due, unless such amount is subject to
a good faith dispute or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or with respect to which (or with respect to
any of the assets of which) a receiver, trustee or similar official has been
appointed.

"Dollars" and "$" means dollars in lawful currency of the United States of
------- -
America.

"Domestic Credit Party" means any Credit Party which is incorporated or
---------------------
organized under the laws of any State of the United States or the District of
Columbia.

"Domestic Subsidiary" means any Subsidiary which is incorporated or
-------------------
organized under the laws of any State of the United States or the District of
Columbia.

"Eligible Assignee" means (i) a Lender; (ii) an affiliate of a Lender; and
-----------------
(iii) any other Person approved by the Administrative Agent and, unless an Event
of Default has occurred and is continuing at the time any assignment is effected
in accordance with Section 11.3, the Borrower (such approval by the
Administrative Agent or the Borrower not to be unreasonably withheld or delayed
and such approval to be deemed given by the Borrower if no objection is received
by the assigning Lender and the Administrative Agent from the Borrower within
two Business Days after notice of such proposed assignment has been provided by
the assigning Lender to the Borrower); provided, however, that neither the
-------- -------
Borrower nor an Affiliate of the Borrower shall qualify as an Eligible Assignee.

"Environmental Laws" means any and all lawful and applicable federal,
------------------
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises, licenses
and other governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of Materials of Environmental
Concern into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of Materials of Environmental Concern.

"Equity Transaction" means, with respect to any member of the Consolidated
------------------
Group, any issuance or sale of shares of its capital stock or other equity
interest, other

8
<PAGE>

than an issuance (i) in connection with a conversion of debt securities to
equity, (ii) in connection with exercise by a present or former employee,
officer or director under a stock incentive plan, stock option plan or other
equity-based compensation plan or arrangement and (iii) of the capital stock of
the Borrower in connection with a Permitted Acquisition.

"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.

"ERISA Affiliate" means an entity which is under common control with the
---------------
Borrower within the meaning of Section 4001(a)(14) of ERISA, or is a member of a
group which includes the Borrower and which is treated as a single employer
under Sections 414(b) or (c) of the Internal Revenue Code.

"ERISA Event" means (i) with respect to any Plan, the occurrence of a
-----------
Reportable Event or the substantial cessation of operations (within the meaning
of Section 4062(e) of ERISA); (ii) the withdrawal by the Borrower or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it was a
substantial employer (as such term is defined in Section 4001(a)(2) of ERISA),
or the termination of a Multiple Employer Plan; (iii) the distribution of a
notice of intent to terminate or the actual termination of a Plan pursuant to
Section 4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under Section 4042 of
ERISA; (v) any event or condition which could reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; (vi) the complete or partial
withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer Plan;
(vii) the conditions for imposition of a lien under Section 302(f) of ERISA
against the Borrower or any ERISA Affiliate exist with respect to any Plan; or
(viii) the adoption of an amendment to any Plan requiring the provision of
security to such Plan pursuant to Section 307 of ERISA.

"Eurodollar Loan" means any Loan that bears interest at a rate based upon
---------------
the Eurodollar Rate.

"Eurodollar Rate" means, for any Eurodollar Loan for any Interest Period
---------------
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined by the Administrative Agent to be equal to the quotient
obtained by dividing (a) the Interbank Offered Rate for such Eurodollar Loan for
such Interest Period by (b) 1 minus the Eurodollar Reserve Requirement for such
Eurodollar Loan for such Interest Period.

"Eurodollar Reserve Requirement" means, at any time, the maximum rate at
------------------------------
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) by member banks of the Federal Reserve System
against "Eurocurrency liabilities" (as such term is used in

9
<PAGE>

Regulation D). Without limiting the effect of the foregoing, the Eurodollar
Reserve Requirement shall reflect any other reserves required to be maintained
by such member banks with respect to (i) any category of liabilities which
includes deposits by reference to which the Eurodollar Rate is to be determined,
or (ii) any category of extensions of credit or other assets which include
Eurodollar Loans. The Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve Requirement.

"Event of Default" shall have the meaning assigned to such term in Section
----------------
9.1.

"Executive Officer" of any Person means any of the chief executive officer,
-----------------
chief operating officer, president, chief accounting officer, vice president,
chief financial officer or treasurer of such Person.

"Existing Letters of Credit" means those Letters of Credit outstanding on
--------------------------
the Closing Date and identified on Schedule 2.6(b).
---------------

"Extension of Credit" means, as to any Lender, the making of, or
-------------------
participation in, a Loan by such Lender (including Continuations and Conversions
thereof) or the issuance or extension of, or participation in, a Letter of
Credit by such Lender.

"Federal Funds Rate" means, for any day, the rate per annum (rounded
------------------
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
--------
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Administrative
Agent (in its individual capacity) on such day on such transactions as
determined by the Administrative Agent.

"Fees" means all fees payable pursuant to Section 3.5.
----

"Foreign Credit Party" means a Credit Party which is not a Domestic Credit
--------------------
Party.

"Foreign Subsidiary" means a Subsidiary which is not a Domestic Subsidiary.
------------------

"Funded Debt" means, with respect to any Person, without duplication, (i)
-----------
the principal amount of all obligations of such Person for borrowed money, (ii)
the principal amount of all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, or upon which interest payments are
customarily made, (iii) the principal amount of all purchase money Indebtedness
(including for purposes hereof, indebtedness and obligations in respect of
conditional sale or title retention arrangements described in clause (c) of the
definition of "Indebtedness" and obligations in respect of the deferred

10
<PAGE>

purchase price of property or services described in clause (d) of the definition
of "Indebtedness") of such Person, including without limitation the principal
portion of all obligations of such Person under Capital Leases, (iv) the
principal amount of all Support Obligations of such Person with respect to
Funded Debt of another Person, (v) the maximum available amount of all standby
letters of credit (other than performance letters of credit) or acceptances
issued or created for the account of such Person, (vi) the principal amount of
all Funded Debt of another Person secured by a Lien on any Property of such
Person, whether or not such Funded Debt has been assumed, provided that for
--------
purposes hereof the amount of such Funded Debt shall be limited to the amount of
such Funded Debt as to which there is recourse to such Person or the fair market
value of the property which is subject to the Lien, if less, (vii) the
outstanding attributed principal amount under any Securitization Transaction,
(viii) the principal balance outstanding under Synthetic Leases and (ix) the
maximum amount of all contingent obligations (including, without limitation,
obligations to make earn-out payments) of such Person incurred in connection
with Permitted Acquisitions and Acquisitions consummated prior to the Closing
Date. The Funded Debt of any Person shall include the Funded Debt of any
partnership or joint venture in which such Person is a general partner or joint
venturer, but only to the extent to which there is recourse to such Person for
the payment of such Funded Debt.

"GAAP" means generally accepted accounting principles in the United States
----
applied on a consistent basis and subject to the terms of Section 1.3.

"Governmental Authority" means any Federal, state, local or foreign court
----------------------
or governmental agency, authority, instrumentality or regulatory body.

"Guaranteed Obligations" means, without duplication, (i) all of the
----------------------
obligations of the Borrower to the Lenders (including the Issuing Lender) and
the Administrative Agent, whenever arising, under this Credit Agreement, the
Notes or any of the other Credit Documents (including, but not limited to, any
interest accruing after the occurrence of a Bankruptcy Event with respect to any
Credit Party, regardless of whether such interest is an allowed claim under the
Bankruptcy Code) and (ii) all liabilities and obligations, whenever arising,
owing from the Borrower to any Lender, or any affiliate of a Lender, arising
under any Hedging Agreement relating to the Obligations.

"Guarantors" means each Person identified as a "Guarantor" on the signature
----------
pages hereto and each other Person which may hereafter become a Guarantor by
execution of a Joinder Agreement, together with their successors and permitted
assigns, and "Guarantor " means any one of them.
---------

"Healthcare Spin-Off" means the spin-off or other disposition of the
-------------------
Borrower's healthcare services division.

"Hedging Agreements" means any interest rate protection agreement or
------------------
foreign currency exchange agreement.

11
<PAGE>

"Indebtedness" means, with respect to any Person, without
------------
duplication, (a) all obligations of such Person for borrowed money,
(b) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, or upon which interest payments are
customarily made, (c) all obligations of such Person under
conditional sale or other title retention agreements relating to
Property purchased by such Person (other than customary reservations
or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such
Person issued or assumed as the deferred purchase price of Property
or services purchased by such Person (other than trade debt incurred
in the ordinary course of business and due within six months of the
incurrence thereof) which would appear as liabilities on a balance
sheet of such Person, (e) all obligations of such Person under
take-or-pay or similar arrangements or under commodities agreements,
(f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on, or payable out of the proceeds of
production from, Property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (g) all
Support Obligations of such Person with respect to Indebtedness of
another Person, (h) the principal portion of all obligations of such
Person under Capital Leases, (i) all obligations of such Person
under Hedging Agreements, (j) the maximum amount of all standby
letters of credit issued or bankers' acceptances facilities created
for the account of such Person and, without duplication, all drafts
drawn thereunder (to the extent unreimbursed), (k) all preferred
Capital Stock issued by such Person and which by the terms thereof
could be (at the request of the holders thereof or otherwise)
subject to mandatory sinking fund payments, redemption or other
acceleration (other than as a result of a Change of Control or an
Asset Disposition that does not in fact result in a redemption of
such preferred Capital Stock) at any time during the term of the
Credit Agreement, (l) the principal portion of all obligations of
such Person under Synthetic Leases, (m) the Indebtedness of any
partnership or unincorporated joint venture in which such Person is
a general partner or a joint venturer, (n) with respect to any
member of the Consolidated Group, the outstanding attributed
principal amount under any Securitization Transaction and (o) the
maximum amount of all contingent obligations (including, without
limitation, obligations to make earn-out payments) of such Person
incurred in connection with Permitted Acquisitions and Acquisitions
consummated prior to the Closing Date.

"Interbank Offered Rate" means, for any Eurodollar Loan for
----------------------
any Interest Period therefor, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) appearing on Dow Jones
Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period. If
for any reason such rate is not available, the term "Interbank
Offered Rate" shall mean, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is
specified on Reuters Screen LIBO Page, the applicable rate shall be
the

<PAGE>

arithmetic mean of all such rates (rounded upwards, if necessary, to
the nearest 1/100 of 1%).

"Interest Payment Date" means (i) as to any Base Rate Loan and
----------------------
any Swingline Loan, the last day of each March, June, September and
December, and the Termination Date, and (ii) as to any Eurodollar
Loan, the last day of each Interest Period for such Loan, the date
of repayment of principal of such Loan and the Termination Date, and
in addition where the applicable Interest Period is more than three
months, then also on the date three months from the beginning of the
Interest Period, and each three months thereafter. If an Interest
Payment Date falls on a date which is not a Business Day, such
Interest Payment Date shall be deemed to be the next succeeding
Business Day.

"Interest Period" means, as to any Eurodollar Loan, a period
---------------
of one, two, three or six months' duration, as the Borrower may
elect, commencing in each case on the date of the borrowing
(including Conversions, Continuations and renewals); provided,
however, (A) if any Interest Period would end on a day which is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day (except where the next succeeding Business
Day falls in the next succeeding calendar month, then on the next
preceding Business Day), (B) no Interest Period shall extend beyond
the Termination Date, and (C) where an Interest Period begins on a
day for which there is no numerically corresponding day in the
calendar month in which the Interest Period is to end, such Interest
Period shall end on the last day of such calendar month.

"Internal Revenue Code" means the Internal Revenue Code of
---------------------
1986, as amended, and any successor statute thereto, as interpreted
by the rules and regulations issued thereunder, in each case as in
effect from time to time. References to sections of the Internal
Revenue Code shall be construed also to refer to any successor
sections.

"Internet Spin-Off" means, with respect to the Borrower's
-----------------
interactive marketing business, any of (a) the creation of a
tracking stock to reflect the performance thereof, (b) the spin-off
thereof or (c) the other disposition thereof.

"Investment" in any Person means (a) the acquisition (whether
----------
for cash, property, services, assumption of Indebtedness, securities
or otherwise) of Capital Stock, bonds, notes, debentures,
partnership, joint ventures or other ownership interests or other
securities of such other Person, (b) any deposit with, or advance,
loan or other extension of credit to, such Person (other than
deposits made in connection with the purchase of equipment or other
assets in the ordinary course of business) or (c) any other capital
contribution to or investment in such Person, including, without
limitation, any Support Obligations (including any support for a
letter of credit issued on behalf of such Person) incurred for the
benefit of such Person, but excluding any Restricted Payment to such
Person.

"Issuing Lender" means Bank of America.
--------------

13
<PAGE>

"Joinder Agreement" means a Joinder Agreement substantially in
-----------------
the form of Schedule 7.12 hereto, executed and delivered by a
Domestic Subsidiary in accordance with the provisions of Section
7.12.

"Lenders" means each of the Persons identified as a "lender"
-------
on the signature pages hereto, and their successors and assigns.

"Letter of Credit" means any Existing Letter of Credit and any
----------------
standby letter of credit issued by the Issuing Lender for the
account of the Borrower in accordance with the terms of Section
2.1(b).

"Licenses" means all licenses, permits and other grants of
--------
authority obtained or required to be obtained from any Governmental
Authorities in connection with the management or operation of the
business of the members of the Consolidated Group or the ownership,
lease, license or use of any Property of the members of the
Consolidated Group.

"Lien" means any mortgage, pledge, hypothecation, assignment,
----
deposit arrangement, security interest, encumbrance, lien (statutory
or otherwise), preference, priority or charge of any kind (including
any agreement to give any of the foregoing, any conditional sale or
other title retention agreement, any financing or similar statement
or notice filed under the Uniform Commercial Code as adopted and in
effect in the relevant jurisdiction or other similar recording or
notice statute, and any lease in the nature thereof).

"Loan" or "Loans" means the Revolving Loans and/or the
---- -----
Swingline Loans, and the Base Rate Loans, Eurodollar Loans and Prime
Rate Swingline Loans comprising such Loans.

"LOC Commitment" means the commitment of the Issuing Lender to
--------------
issue Letters of Credit in an aggregate face amount at any time
outstanding (together with the amounts of any unreimbursed drawings
thereon) of up to the LOC Committed Amount and the commitment of the
Lenders to purchase participation interests in the LOC Obligations
up to their respective Revolving Commitment Percentage as provided
in Section 2.6(b).

"LOC Committed Amount" shall have the meaning assigned to such
--------------------
term in Section 2.1(b).

"LOC Documents" means, with respect to any Letter of Credit,
-------------
such Letter of Credit, any amendments thereto, any documents
delivered in connection therewith, any application therefor, and any
agreements, instruments, guarantees or other documents (whether
general in application or applicable only to such Letter of Credit)
governing or providing for (i) the rights and obligations of the
parties concerned or at risk or (ii) any collateral security for
such obligations.

"LOC Obligations" means, at any time, the sum of (i) the
---------------
maximum amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then

14
<PAGE>

outstanding, assuming compliance with all requirements for drawings
referred to in such Letters of Credit plus (ii) the aggregate amount
----
of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed by the Borrower.

"Material Adverse Effect" means a material adverse effect on
-----------------------
(i) the condition (financial or otherwise), operations, business,
assets or liabilities of the Consolidated Group taken as a whole,
(ii) the ability of any Credit Party to perform any material
obligation under the Credit Documents to which it is a party or
(iii) the material rights and remedies of the Administrative Agent
and the Lenders under the Credit Documents.

"Material Subsidiary" means any Wholly-Owned Subsidiary which
-------------------
constitutes more than five percent (5%) of the consolidated assets
of the Consolidated Group as of the end of the immediately preceding
fiscal quarter or generates more than five percent (5%) of the
consolidated revenues of the Consolidated Group for the period of
four consecutive fiscal quarters ending as of the end of the
immediately preceding fiscal quarter.

"Materials of Environmental Concern" means any gasoline or
----------------------------------
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Laws,
including, without limitation, asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.

"Moody's" means Moody's Investors Service, Inc., or any
-------
successor or assignee of the business of such company in the
business of rating securities.

"Multiemployer Plan" means a Plan which is a "multiemployer
------------------
plan" as defined in Sections 3(37) or 4001(a)(3) of ERISA.

"Multiple Employer Plan" means a Plan (other than a
----------------------
Multiemployer Plan) which the Borrower or any ERISA Affiliate and at
least one employer other than the Borrower or any ERISA Affiliate
are contributing sponsors.

"Non-Guarantor Subsidiary" shall have the meaning assigned to
------------------------
such term in Section 7.12.

"Note" or "Notes" means any of the Revolving Notes.
----- -------
"Notice of Borrowing" means a written notice of borrowing in
-------------------
substantially the form of Schedule 2.2(a)(i), as required by Section
------------------
2.2(a)(i) and Section 2.2(a)(iii).

"Notice of Continuation/Conversion" means the written notice
---------------------------------
of Continuation or Conversion in substantially the form of Schedule
--------
3.2, as required by Section 3.2.
---
"Obligations" means, collectively, the Revolving Loans, the
-----------
Swingline Loans and the LOC Obligations.

15
<PAGE>

"Operating Lease" means, as applied to any Person, any lease
---------------
(including, without limitation, leases which may be terminated by the lessee at
any time) of any Property which is not a Capital Lease other than any such lease
in which that Person is the lessor.

"Other Taxes" shall have the meaning assigned to such term in Section
-----------
3.11.

"Participation Interest" means the purchase by a Lender of a
----------------------
participation in LOC Obligations as provided in Section 2.6(b), in Swingline
Loans as provided in Section 2.7 and in Loans as provided in Section 3.14.

"PBGC" means the Pension Benefit Guaranty Corporation established
----
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.

"Permitted Acquisition" means any Acquisition by a member of the
---------------------
Consolidated Group, provided that (i) consideration paid is not greater than the
fair market value thereof, (ii) the Person or Property which is the subject of
such Acquisition shall be in the same or similar line of business as the members
of the Consolidated Group which are parties thereto, (iii) in the case of a
merger or consolidation, and in other cases where appropriate, the board of
directors or other governing body of the other Person which is the subject of
the transaction of merger or consolidation shall have approved such Acquisition,
(iv) no Default or Event of Default shall exist immediately after giving effect
to such Acquisition, (v) the Borrower shall have delivered to the Administrative
Agent a Pro Forma Compliance Certificate demonstrating that, upon giving effect
to such Acquisition on a Pro Forma Basis, the Credit Parties shall be in
compliance with all of the covenants set forth in Section 7.11, (vi) if the
Acquisition involves an interest in a partnership and a requirement that a
member of the Consolidated Group be a general partner, the general partner shall
be a newly formed special purpose Subsidiary of the Borrower, (vii) the Credit
Parties shall, and shall cause the party which is the subject of the Acquisition
to, take such actions as may be necessary for compliance with the provisions of
Sections 7.12, and (viii) the consideration (including cash and non-cash
consideration, any assumption of Indebtedness and the maximum amount of any
contingent payment (including, without limitation, earn-out payments), but
excluding consideration consisting of any Capital Stock of the Borrower issued
to the seller of the Capital Stock or Property acquired in such Acquisition)
paid in connection with any Acquisition (or series of related Acquisitions)
shall not exceed $75,000,000.

"Permitted Investments" means Investments which are (i) cash and Cash
---------------------
Equivalents; (ii) accounts receivable of a member of the Consolidated Group
created, acquired or made in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; (iii) Investments
consisting of Capital Stock, obligations, securities or other Property received
in settlement of accounts receivable (created in the ordinary course of
business) from bankrupt obligors; (iv) Investments existing as of the Closing
Date and set forth in Schedule 8.6; (v) advances or loans to directors, officers
------------
and employees that do not exceed $5,000,000 in the aggregate at any one time
outstanding for all members of the Consolidated Group; (vi) advances or loans to

16
<PAGE>

customers and suppliers in the ordinary course of business that do not exceed
$10,000,000 in the aggregate at any one time outstanding for all members of the
Consolidated Group; (vii) Investments by members of the Consolidated Group in
their Subsidiaries and Affiliates existing on the Closing Date, (viii)
Investments by members of the Consolidated Group in and to Domestic Credit
Parties, (ix) Investments which constitute Permitted Acquisitions, (x) seller
financing notes in an aggregate amount not to exceed $15 million at any time
acquired in connection with Asset Dispositions, and (xi) Investments of a nature
not contemplated in the foregoing subsections in an amount not to exceed
$15,000,000 in the aggregate at any time outstanding.

"Permitted Liens" means:
---------------

(i) Liens (other than Liens created or imposed under ERISA) for
taxes, assessments or governmental charges or levies not yet due or Liens for
taxes being contested in good faith by appropriate proceedings for which
adequate reserves determined in accordance with GAAP have been established (and
as to which the Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof);

(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens imposed by
law or pursuant to customary reservations or retentions of title arising in the
ordinary course of business, provided that such Liens secure only amounts not
--------
yet due and payable or, if due and payable, are unfiled and no other action has
been taken to enforce the same or are being contested in good faith by
appropriate proceedings for which adequate reserves determined in accordance
with GAAP have been established (and as to which the Property subject to any
such Lien is not yet subject to foreclosure, sale or loss on account thereof);

(iii) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by any member of the Consolidated Group in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, bids, leases, government
contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);

(iv) Liens in connection with attachments or judgments (including
judgment or appeal bonds) provided that the judgments secured shall, within 30
--------
days after the entry thereof, have been discharged or execution thereof stayed
pending appeal, or shall have been discharged within 30 days after the
expiration of any such stay;

(v) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use of the
encumbered Property for its intended purposes;

(vi) Liens on Property of any Person securing Indebtedness
(including Capital Leases and Synthetic Leases) of such Person to the extent
permitted under Section 8.1(c),

17
<PAGE>

provided that any such Lien attaches only to the Property financed or leased and
- --------
such Lien attaches concurrently with or within 90 days after the acquisition
thereof;

(vii) leases or subleases granted to others not interfering in any
material respect with the business of any member of the Consolidated Group;

(viii) any interest or title of a lessor under, and Liens arising
from UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, leases permitted by this
Credit Agreement;

(ix) Liens in favor of customs and revenue authorities arising as
a matter of law to secure payment of customs duties in connection with the
importation of goods;

(x) Liens deemed to exist in connection with Investments in
repurchase agreements which constitute Permitted Investments;

(xi) normal and customary rights of setoff upon deposits of cash
in favor of banks or other depository institutions;

(xii) Liens of a collection bank arising under Section 4-210 of the
Uniform Commercial Code on items in the course of collection;

(xiii) Liens on Property of any Person securing Indebtednessof such
Person to the extent permitted under Section 8.1(h); and

(xiv) Liens existing as of the Closing Date and set forth on
Schedule 6.8; provided that (a) no such Lien shall at any time be extended to or
- ------------ --------
cover any Property other than the Property subject thereto on the Closing Date
and (b) the principal amount of the Indebtedness secured by such Liens shall not
be refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing.

"Person" means any individual, partnership, joint venture, firm,
------
corporation, limited liability company, association, trust or other enterprise
(whether or not incorporated) or any Governmental Authority.

"Plan" means any employee benefit plan (as defined in Section 3(3)
----
of ERISA) which is subject to Title IV of ERISA and with respect to which the
Borrower or any ERISA Affiliate is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer" within
the meaning of Section 3(5) of ERISA.

"Prime Rate" means the rate of interest per annum publicly announced
----------
from time to time by Bank of America as its prime rate in effect at its
principal office in Charlotte, North Carolina, with each change in the Prime
Rate being effective on the date such change is publicly announced as effective
(it being understood and agreed that the Prime Rate is a reference rate used by
Bank of America in determining interest rates on certain loans and is

18
<PAGE>

not intended to be the lowest rate of interest charged on any extension of
credit by Bank of America to any debtor).

"Prime Rate Swingline Loans" means any Swingline Loan that bears
--------------------------
interest at a rate based upon the Prime Rate.

"Pro Forma Basis" means, for purposes of calculating (utilizing the
---------------
principles set forth in the second paragraph of Section 1.3) the applicable
pricing level under the definition of "Applicable Percentage" and determining
compliance with each of the financial covenants set forth in Section 7.11, that
any transaction shall be deemed to have occurred as of the first day of the four
fiscal-quarter period ending as of the most recent fiscal quarter end preceding
the date of such transaction with respect to which the Administrative Agent has
received the Required Financial Information. As used herein, "transaction" shall
-----------
mean (i) any merger or consolidation as referred to in Section 8.4, (ii) any
Asset Disposition as referred to in Section 8.5, (iii) any Acquisition as
referred to in the definition of "Permitted Acquisition" or (iv) any Restricted
---------------------
Payment as referred to in Section 8.8. In connection with any calculation of the
financial covenants set forth in Section 7.11 upon giving effect to a
transaction on a Pro Forma Basis:

(A) for purposes of any such calculation in respect of any
Asset Disposition referred to in Section 8.5, (1) income statement
items (whether positive or negative) attributable to the Property
disposed of in such Asset Disposition shall be excluded and (2) any
Indebtedness which is retired in connection with such Asset
Disposition shall be excluded and deemed to have been retired as of
the first day of the applicable period; and

(B) for purposes of any such calculation in respect of any
merger or consolidation referred to in Section 8.4 or any
Acquisition referred to in the definition of "Permitted
---------
Acquisition", (1) any Indebtedness incurred by any member of the
-----------
Consolidated Group in connection with such transaction (x) shall be
deemed to have been incurred as of the first day of the applicable
period and (y) if such Indebtedness has a floating or formula rate,
shall have an implied rate of interest for the applicable period for
purposes of this definition determined by utilizing the rate which
is or would be in effect with respect to such Indebtedness as at the
relevant date of determination, and (2) income statement items
(whether positive or negative) attributable to the Property acquired
in such transaction or to the Acquisition comprising such
transaction, as applicable, shall be included beginning as of the
first day of the applicable period.

"Pro Forma Compliance Certificate" means a certificate of an
--------------------------------
Executive Officer of the Borrower delivered to the Administrative Agent in
connection with (i) any merger or consolidation referred to in Section 8.4, (ii)
any Asset Disposition referred to in Section 8.5, (iii) any Acquisition referred
to in the definition of "Permitted Acquisition" or (iv) any Restricted Payment
---------------------
as referred to in Section 8.8, as applicable, and containing reasonably detailed
calculations, upon giving effect to the applicable transaction on a Pro Forma
Basis, of the Consolidated Interest Coverage Ratio and the Consolidated Total

19
<PAGE>

Leverage Ratio as of the most recent fiscal quarter end preceding the date of
the applicable transaction with respect to which the Administrative Agent shall
have received the Required Financial Information.

"Property" means any interest in any kind of property or asset,
--------
whether real, personal or mixed, or tangible or intangible.

"Rate Determination Date" shall have the meaning assigned to such
-----------------------
term in the definition of "Applicable Percentage".

"Register" shall have the meaning assigned to such term in Section
--------
11.3(c).

"Registration Statement" means the Registration Statement of the
----------------------
Borrower on Form S-4, initially filed with the Securities and Exhange Commission
on June 28, 1999, as amended by Amendment No. 1 thereto filed with the
Securities and Exchange Commission on August 10, 1999.

"Regulation D, O, T, U, or X" means Regulation D, O, T, U or X,
---------------------------
respectively, of the Board of Governors of the Federal Reserve System as from
time to time in effect and any successor to all or a portion thereof.

"Reportable Event" means any of the events set forth in Section
----------------
4043(c) of ERISA, other than those events as to which the notice requirement has
been waived by regulation.

"Required Financial Information" means the annual and quarterly
------------------------------
compliance certificates and related financial statements and information
required by the provisions of Sections 7.1(a), (b) and (c), as referenced in the
definition of "Applicable Percentage".

"Required Lenders" means, at any time, Lenders having more than
----------------
fifty percent (50%) of the aggregate Commitments, or if the Commitments have
been terminated, Lenders having more than fifty percent (50%) of the aggregate
principal amount of the Obligations outstanding (taking into account in each
case Participation Interests or obligation to participate therein); provided
--------
that the Commitments of, and outstanding principal amount of Obligations (taking
into account Participation Interests therein) owing to, a Defaulting Lender
shall be excluded for purposes hereof in making a determination of Required
Lenders.

"Requirement of Law" means, as to any Person, the certificate of
------------------
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule, regulation or ordinance (including, without
limitation, Environmental Laws) or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or to which any of its material Property is subject.

"Restricted Payment" means (i) any dividend or other payment or
------------------
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any member of

20
<PAGE>

the Consolidated Group, now or hereafter outstanding (including without
limitation any payment in connection with any dissolution, merger, consolidation
or disposition involving any member of the Consolidated Group), or to the
holders, in their capacity as such, of any shares of any class of Capital Stock
of any member of the Consolidated Group, now or hereafter outstanding (other
than dividends or distributions payable in the same class of Capital Stock of
the applicable Person or dividends or distributions payable to any Credit Party
(directly or indirectly through Subsidiaries)), (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any shares of any class of Capital Stock of any member of the
Consolidated Group, now or hereafter outstanding, and (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of Capital Stock of any member of
the Consolidated Group, now or hereafter outstanding.

"Revolving Commitment" means, with respect to each Lender, the
--------------------
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding of up to such Lender's Revolving Commitment
Percentage of the Aggregate Revolving Committed Amount.

"Revolving Commitment Percentage" means, for each Lender, a fraction
-------------------------------
(expressed as a percentage) the numerator of which is the Revolving Committed
Amount of such Lender at such time and the denominator of which is the Aggregate
Revolving Committed Amount at such time. The initial Revolving Commitment
Percentage of each Lender is set out on Schedule 2.1.
------------

"Revolving Committed Amount" means, with respect to each Lender, the
--------------------------
amount of such Lender's Revolving Commitment as specified in Schedule 2.1, as
------------
such amount may be reduced from time to time in accordance with the provisions
hereof. The initial Revolving Committed Amount of each Lender is set out on
Schedule 2.1.
- ------------

"Revolving Loans" shall have the meaning assigned to such term in
---------------
Section 2.1(a).

"Revolving Note" or "Revolving Notes" means the promissory notes of
-------------- ---------------
the Borrower in favor of each of the Lenders evidencing the Revolving Loans and
Swingline Loans in substantially the form attached as Schedule 2.5, individually
------------
or collectively, as appropriate, as such promissory notes may be amended,
modified, supplemented, extended, renewed or replaced from time to time.

"S&P" means Standard & Poor's Ratings Group, a division of The
---
McGraw Hill Companies, Inc., or any successor or assignee of the business of
such division in the business of rating securities.

"Sale and Leaseback Transaction" means any arrangement pursuant to
------------------------------
which any member of the Consolidated Group, directly or indirectly, becomes
liable as lessee, guarantor or other surety with respect to any lease, whether
an Operating Lease or a Capital Lease, of any Property (a) which such member of
the Consolidated

21
<PAGE>

Group has sold or transferred (or is to sell or transfer) to a Person which is
not a member of the Consolidated Group or (b) which such member of the
Consolidated Group intends to use for substantially the same purpose as any
other Property which has been sold or transferred (or is to be sold or
transferred) by such member of the Consolidated Group to another Person which is
not a member of the Consolidated Group in connection with such lease.

"Securities Exchange Act" means the Securities Exchange Act of 1934.
-----------------------

"Securitization Transaction" means any financing transaction or
--------------------------
series of financing transactions that have been or may be entered into by a
member of the Consolidated Group pursuant to which such member of the
Consolidated Group may sell, convey or otherwise transfer to (i) a Subsidiary or
affiliate (a "Securitization Subsidiary"), or (ii) any other Person, or may
-------------------------
grant a security interest in, any accounts receivable, notes receivable, rights
to future lease payments or residuals or other similar rights to payment (the
"Securitization Receivables") (whether such Securitization Receivables are then
--------------------------
existing or arising in the future) of such member of the Consolidated Group, and
any assets related thereto, including without limitation, all security interests
in merchandise or services financed thereby, the proceeds of such Securitization
Receivables, and other assets which are customarily sold or in respect of which
security interests are customarily granted in connection with securitization
transactions involving such assets.

"Single Employer Plan" means any Plan which is covered by Title IV
--------------------
of ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.

"Standby Letter of Credit Fee" shall have the meaning assigned to
----------------------------
such term in Section 3.5(b)(i).

"Subordinated Debt" means any Indebtedness of a member of the
-----------------
Consolidated Group which by its terms is expressly subordinated in right of
payment to the prior payment of the loans and obligations under the Credit
Agreement and the other Credit Documents on the terms and conditions and
evidenced by documentation satisfactory to the Administrative Agent and the
Required Lenders.

"Subsidiary" means, as to any Person at any time, (a) any
----------
corporation more than 50% of whose Capital Stock of any class or classes having
by the terms thereof ordinary voting power to elect a majority of the directors
of such corporation (irrespective of whether or not at such time, any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at such time owned by such Person directly
or indirectly through Subsidiaries, and (b) any partnership, association, joint
venture or other entity of which such Person directly or indirectly through
Subsidiaries owns at such time more than 50% of the Capital Stock.

"Support Obligations" means, with respect to any Person, without
-------------------
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including

22
<PAGE>

without limitation any obligation, whether or not contingent, (i) to purchase
any such Indebtedness or any Property constituting security therefor, (ii) to
advance or provide funds or other support for the payment or purchase of any
such Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep well
agreements, maintenance agreements, comfort letters or similar agreements or
arrangements) for the benefit of any holder of Indebtedness of such other
Person, (iii) to lease or purchase Property, securities or services primarily
for the purpose of assuring the holder of such Indebtedness, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness against loss
in respect thereof. The amount of any Support Obligation hereunder shall
(subject to any limitations set forth therein) be deemed to be an amount equal
to the outstanding principal amount (or maximum principal amount, if larger) of
the Indebtedness in respect of which such Support Obligation is made.

"Swingline Commitment" means the commitment of the Swingline Lender
--------------------
to make Swingline Loans in an aggregate principal amount at any time outstanding
up to the Swingline Committed Amount and the commitment of the Lenders to
purchase participation interests in the Swingline Loans up to their respective
Revolving Commitment Percentage as provided in Section 2.1(c), as such amounts
may be reduced from time to time in accordance with the provisions hereof.

"Swingline Committed Amount" shall have the meaning assigned to such
--------------------------
term in Section 2.1(c).

"Swingline Lender" means Bank of America.
----------------

"Swingline Loan" means a swingline revolving loan made by the
--------------
Swingline Lender pursuant to the provisions of Section 2.1(c).

"Synthetic Lease" means any synthetic lease, tax retention operating
---------------
lease, off-balance sheet loan or similar off-balance sheet financing product
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an Operating Lease under GAAP.

"Taxes" shall have the meaning assigned to such term in Section
-----
3.11.

"Termination Date" means the earlier of (i) August 27, 2003 or such
----------------
later date as to which all of the Lenders may in their sole discretion by
written consent agree or (ii) the date on which the Commitments terminate in
accordance with the provisions of this Credit Agreement.

"Voting Stock" means, with respect to any Person, Capital Stock
------------
issued by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.

23
<PAGE>

"Wholly Owned Subsidiary" of any Person means any Subsidiary 100% of
-----------------------
whose Voting Stock is at the time owned by such Person directly or
indirectly through other Wholly Owned Subsidiaries.

"Year 2000 Compliant" shall have the meaning assigned to such term
-------------------
in Section 6.17.

1.2 Computation of Time Periods.
---------------------------

For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding."

1.3 Accounting Terms.
----------------

Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section 7.1,
consistent with the annual audited financial statements referenced in Section
6.1(i)); provided, however, if (a) the Borrower shall object to determining such
-------- -------
compliance on such basis at the time of delivery of such financial statements
due to any change in GAAP or the rules promulgated with respect thereto or (b)
the Administrative Agent or the Required Lenders shall so object in writing
within 60 days after delivery of such financial statements, then such
calculations shall be made on a basis consistent with the most recent financial
statements delivered by the Credit Parties to the Lenders as to which no such
objection shall have been made.

Notwithstanding the above, the parties hereto acknowledge and agree that, for
purposes of all calculations made under the financial covenants set forth in
Section 7.11 (including without limitation for purposes of the definitions of
"Applicable Percentage" and "Pro Forma Basis"), (i) in connection with any Asset
Disposition referred to in Section 8.5, (A) income statement items (whether
positive or negative) attributable to the Property disposed of shall be excluded
to the extent relating to any period occurring prior to the date of such
transaction and (B) Indebtedness which is retired shall be excluded and deemed
to have been retired as of the first day of the applicable period and (ii) in
connection with any merger or consolidation referred to in Section 8.4 or any
Acquisition referred to in the definition of "Permitted Acquisition", (A) income
---------------------
statement items attributable to the Person or Property acquired shall, to the
extent not otherwise included in such income statement items for the members of
the Consolidated Group in accordance with GAAP or in accordance with any defined
terms set forth in Section 1.1, be included to the extent relating to any period
applicable in such calculations, (B) Indebtedness of the Person or Property
acquired shall be deemed to have been incurred as of the first day of the
applicable period and (C) pro forma adjustments may be included to the extent
that such adjustments would be permitted under GAAP and give effect to items
that are (x) directly

24
<PAGE>

attributable to such transaction, (y) expected to have a continuing impact on
the Consolidated Group and (z) factually supportable.

SECTION 2

CREDIT FACILITIES

2.1 Commitments.
-----------

(a) Revolving Commitment. During the Commitment Period, subject to the
--------------------
terms and conditions hereof, each Lender severally agrees to make revolving
loans (the "Revolving Loans") in Dollars to the Borrower in the amount of such
---------------
Lender's Revolving Commitment Percentage of such Revolving Loans for the
purposes hereinafter set forth; provided that (i) with regard to the Lenders
--------
collectively, the aggregate principal amount of Obligations at any time shall
not exceed ONE HUNDRED NINETY-FIVE MILLION DOLLARS ($195,000,000) (as such
amount may be reduced from time to time in accordance with the provisions
hereof, the "Aggregate Revolving Committed Amount") and (ii) with regard to each
------------------------------------
Lender individually, such Lender's Revolving Commitment Percentage of
Obligations at any time shall not exceed such Lender's Revolving Committed
Amount. Revolving Loans may consist of Base Rate Loans or Eurodollar Loans, or a
combination thereof, as the Borrower may request, and may be repaid and
reborrowed in accordance with the provisions hereof.

(b) Letter of Credit Commitment. During the Commitment Period, subject to
---------------------------
the terms and conditions hereof and of the LOC Documents, if any, and such other
terms and conditions which the Issuing Lender may reasonably require, the
Issuing Lender shall issue, and the Lenders shall participate severally in, such
Letters of Credit in Dollars on a sight basis as the Borrower may request, in
form acceptable to the Issuing Lender, for the purposes hereinafter set forth;
provided that (i) the aggregate amount of LOC Obligations shall not exceed TEN
- --------
MILLION DOLLARS ($10,000,000) at any time (as such amount may be reduced from
time to time in accordance with the provisions hereof, the "LOC Committed
-------------
Amount"), (ii) with regard to the Lenders collectively, the aggregate principal
- ------
amount of Obligations at any time shall not exceed the Aggregate Revolving
Committed Amount and (iii) with regard to each Lender individually, such
Lender's Revolving Commitment Percentage of Obligations at any time shall not
exceed such Lender's Revolving Committed Amount. Letters of Credit issued
hereunder shall have an expiry date not more than one year from the date of
issuance or extension, and may not extend beyond the date five (5) Business Days
prior to the Termination Date.

(c) Swingline Commitment. During the Commitment Period, subject to the
--------------------
terms and conditions hereof, the Swingline Lender agrees to make certain
revolving loans (the "Swingline Loans") in Dollars to the Borrower; provided
--------------- --------
that (i) the aggregate principal amount of Swingline Loans shall not exceed TEN
MILLION DOLLARS ($10,000,000) (as such amount may be reduced from time to time
in accordance with the provisions hereof, the "Swingline Committed Amount"),
--------------------------
(ii) with regard to the Lenders collectively, the aggregate principal amount of
Obligations at any time shall not exceed the Aggregate Revolving Committed
Amount and (iii) with regard to each Lender individually, such Lender's
Revolving Commitment

25
<PAGE>

Percentage of Obligations at any time shall not exceed such Lender's Revolving
Committed Amount. Swingline Loans shall be made as Prime Rate Swingline Loans
and may be repaid and reborrowed in accordance with the provisions hereof.

2.2 Method of Borrowing.
-------------------

(a) Notice of Request for Extensions of Credit. The Borrower shall
------------------------------------------
request an Extension of Credit hereunder by written notice (or telephone notice
promptly confirmed in writing) as follows:

(i) Revolving Loans. In the case of Revolving Loans, to the
---------------
Administrative Agent not later than 11:00 A.M. (Charlotte, North Carolina
time) on the Business Day prior to the date of the requested borrowing in
the case of Base Rate Loans, and on the third Business Day prior to the
date of the requested borrowing in the case of Eurodollar Loans. Each such
request for borrowing shall be irrevocable and shall specify (A) that a
Revolving Loan is requested, (B) the date of the requested borrowing
(which shall be a Business Day), (C) the aggregate principal amount to be
borrowed, and (D) whether the borrowing shall be comprised of Base Rate
Loans, Eurodollar Loans or a combination thereof, and if Eurodollar Loans
are requested, the Interest Period(s) therefor. A form of Notice of
Borrowing is attached as Schedule 2.2(a)(i). The Administrative Agent
shall give notice to each Lender promptly upon receipt of each Notice of
Borrowing pursuant to this Section 2.2(a)(i), the contents thereof and
-----------------
each such Lender's share of any borrowing to be made pursuant thereto.

(ii) Letters of Credit. In the case of Letters of Credit, to the
-----------------
Issuing Lender with a copy to the Administrative Agent not later than
11:00 A.M. (Charlotte, North Carolina time) on the third Business Day
prior to the date of the requested issuance or extension (or such shorter
period as may be agreed by the Issuing Lender). Each such request for
issuance or extension of a Letter of Credit shall be irrevocable and shall
specify, among other things, (A) that a Letter of Credit is requested, (B)
the date of the requested issuance or extension, (C) the type, amount,
expiry date and terms on which the Letter of Credit is to be issued or
extended, and (D) the beneficiary. A form of Notice of Request for Letter
of Credit is attached as Schedule 2.2(a)(ii).
-------------------

(iii) Swingline Loans. In the case of Swingline Loans, to the
---------------
Swingline Lender not later than 11:00 A.M. (Charlotte, North Carolina
time) on the Business Day of the requested borrowing. Each such request
for borrowing shall be irrevocable and shall specify (A) that a Swingline
Loan is requested, (B) the date of the requested borrowing (which shall be
a Business Day), (C) the aggregate principal amount to be borrowed, and
(D) the maturity requested therefor. A form of Notice of Borrowing is
attached as Schedule 2.2(a)(i). Each Swingline Loan shall have a maturity
------------------
date as the Borrower may request and the Swingline Lender may agree.

(b) Minimum Amounts. Each Revolving Loan advance shall be in a minimum
---------------
principal amount of $5,000,000, in the case of Eurodollar Loans, or $1,000,000
(or the remaining Committed Amount, if less), in the case of Base Rate Loans,
and integral multiples of $250,000

26
<PAGE>

in excess thereof. Each Swingline Loan advance shall be in a minimum principal
amount of $500,000 and integral multiples of $100,000 in excess thereof.

(c) Information Not Provided. If in connection with any such request for
------------------------
a Revolving Loan, the Borrower shall fail to specify (i) an applicable Interest
Period in the case of a Eurodollar Loan, the Borrower shall be deemed to have
requested an Interest Period of one month, or (ii) the type of loan requested,
the Borrower shall be deemed to have requested a Base Rate Loan.

(d) Maximum Number of Eurodollar Loans. In connection with any request
----------------------------------
for a Revolving Loan, the Revolving Loans may be comprised of no more than ten
(10) Eurodollar Loans outstanding at any time. For purposes hereof, Eurodollar
Loans with separate or different Interest Periods will be considered as separate
Eurodollar Loans even if their Interest Periods expire on the same date.

2.3 Interest.
--------

Subject to Section 3.1, the Loans hereunder shall bear interest at a per
annum rate, payable in arrears on each applicable Interest Payment Date (or at
such other times as may be specified herein), as follows:

(a) Base Rate Loans. During such periods as the Revolving Loans
---------------
shall be comprised of Base Rate Loans, the Loans shall bear interest at
the Adjusted Base Rate;

(b) Eurodollar Loans. During such periods as the Revolving Loans
----------------
shall be comprised of Eurodollar Loans, the Loans shall bear interest at
the Adjusted Eurodollar Rate; and

(c) Prime Rate Swingline Loans. Swingline Loans shall bear interest
--------------------------
at the Prime Rate plus the Applicable Percentage for Base Rate Loans.

2.4 Repayment.
---------

(a) Revolving Loans. The principal amount of all Revolving Loans
---------------
shall be due and payable in full on the Termination Date.

(b) Swingline Loans. The principal amount of all Swingline Loans
---------------
shall be due and payable on the earlier of (A) the maturity date agreed to
by the Swingline Lender and the Borrower with respect to such Loan, and
(B) the Termination Date.

2.5 Notes.
-----

The Revolving Loans and Swingline Loans shall be evidenced by the
Revolving Notes.

2.6 Additional Provisions relating to Letters of Credit.
---------------------------------------------------

27
<PAGE>

(a) Reports. The Issuing Lender will provide to the Administrative Agent
-------
at least monthly, and more frequently upon request, a detailed summary report on
all Letters of Credit and the activity thereon, in form and substance acceptable
to the Administrative Agent. In addition, the Issuing Lender will provide to the
Administrative Agent for dissemination to the Lenders (i) upon the issuance or
amendment of a Letter of Credit, a detailed summary report on such Letter of
Credit, including, among other things, the Credit Party for whose account the
Letter of Credit is issued, the beneficiary, the face amount, and the expiry
date, and (ii) at least quarterly, and more frequently upon request, a detailed
summary report on all Letters of Credit and the activity thereon, including,
among other things, the Credit Party for whose account the Letter of Credit is
issued, the beneficiary, the face amount, and the expiry date. The Issuing
Lender will provide copies of the Letters of Credit to the Administrative Agent
and the Lenders promptly upon request.

(b) Participation. Each Lender, with respect to the Existing Letters of
-------------
Credit, hereby purchases a participation interest in such Existing Letters of
Credit, and with respect to Letters of Credit issued on or after the Closing
Date, upon issuance of a Letter of Credit, shall be deemed to have purchased
without recourse a risk participation from the Issuing Lender in such Letter of
Credit and the obligations arising thereunder, in each case in an amount equal
to its pro rata share of the obligations under such Letter of Credit (based on
the respective Revolving Commitment Percentages of the Lenders) and shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and be obligated to pay to the Issuing Lender therefor and discharge
when due, its pro rata share of the obligations arising under such Letter of
Credit. Without limiting the scope and nature of each Lender's participation in
any Letter of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any such Letter of Credit, each Lender
shall pay to the Issuing Lender its pro rata share of such unreimbursed drawing
in same day funds on the day of notification by the Issuing Lender of an
unreimbursed drawing pursuant to the provisions of subsection (d) hereof. The
obligation of each Lender to so reimburse the Issuing Lender shall be absolute
and unconditional and shall not be affected by the occurrence of a Default, an
Event of Default or any other occurrence or event. Any such reimbursement shall
not relieve or otherwise impair the obligation of the Borrower to reimburse the
Issuing Lender under any Letter of Credit, together with interest as hereinafter
provided.

(c) Reimbursement. In the event of any drawing under any Letter of Credit,
-------------
the Issuing Lender will promptly notify the Borrower. Unless the Borrower shall
immediately notify the Issuing Lender that the Borrower intends to otherwise
reimburse the Issuing Lender for such drawing, the Borrower shall be deemed to
have requested that the Lenders make a Revolving Loan in the amount of the
drawing as provided in subsection (d) hereof on the related Letter of Credit,
the proceeds of which will be used to satisfy the related reimbursement
obligations. The Borrower promises to reimburse the Issuing Lender on the day of
drawing under any Letter of Credit (either with the proceeds of a Revolving Loan
obtained hereunder or otherwise) in same day funds. If the Borrower shall fail
to reimburse the Issuing Lender as provided hereinabove, the unreimbursed amount
of such drawing shall bear interest at a per annum rate equal to the Adjusted
Base Rate plus two percent (2%). The Borrower's reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of setoff, counterclaim or defense to payment the
Borrower may claim or have against the Issuing Lender, the Administrative Agent,
the Lenders, the beneficiary of the Letter of Credit drawn upon or any other
Person, including

28
<PAGE>

without limitation any defense based on any failure of the Borrower or any other
Credit Party to receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The Issuing Lender will promptly
notify the other Lenders of the amount of any unreimbursed drawing and each
Lender shall promptly pay to the Administrative Agent for the account of the
Issuing Lender in Dollars and in immediately available funds, the amount of such
Lender's Revolving Commitment Percentage of such unreimbursed drawing. Such
payment shall be made on the day such notice is received by such Lender from the
Issuing Lender if such notice is received at or before 2:00 P.M. (Charlotte,
North Carolina time) otherwise such payment shall be made at or before 12:00
Noon (Charlotte, North Carolina time) on the Business Day next succeeding the
day such notice is received. If such Lender does not pay such amount to the
Issuing Lender in full upon such request, such Lender shall, on demand, pay to
the Administrative Agent for the account of the Issuing Lender interest on the
unpaid amount during the period from the date of such drawing until such Lender
pays such amount to the Issuing Lender in full at a rate per annum equal to, if
paid within two (2) Business Days of the date that such Lender is required to
make payments of such amount pursuant to the preceding sentence, the Federal
Funds Rate and thereafter at a rate equal to the Base Rate. Each Lender's
obligation to make such payment to the Issuing Lender, and the right of the
Issuing Lender to receive the same, shall be absolute and unconditional, shall
not be affected by any circumstance whatsoever and without regard to the
termination of this Credit Agreement or the Commitments hereunder, the existence
of a Default or Event of Default or the acceleration of the obligations of the
Borrower hereunder and shall be made without any offset, abatement, withholding
or reduction whatsoever. Simultaneously with the making of each such payment by
a Lender to the Issuing Lender, such Lender shall, automatically and without any
further action on the part of the Issuing Lender or such Lender, acquire a
participation in an amount equal to such payment (excluding the portion of such
payment constituting interest owing to the Issuing Lender) in the related
unreimbursed drawing portion of the LOC Obligation and in the interest thereon
and in the related LOC Documents, and shall have a claim against the Borrower
with respect thereto.

(d) Repayment with Revolving Loans. On any day on which the Borrower shall
------------------------------
have requested, or been deemed to have requested, a Revolving Loan advance to
reimburse a drawing under a Letter of Credit, the Administrative Agent shall
give notice to the Lenders that a Revolving Loan has been requested or deemed
requested by the Borrower to be made in connection with a drawing under a Letter
of Credit, in which case a Revolving Loan advance comprised of Base Rate Loans
(or Eurodollar Loans to the extent the Borrower has complied with the procedures
of Section 2.2(a)(i) with respect thereto) shall be immediately made to the
Borrower by all Lenders (notwithstanding any termination of the Commitments
pursuant to Section 9.2) pro rata based on the respective Revolving Commitment
Percentages of the Lenders (determined before giving effect to any termination
of the Commitments pursuant to Section 9.2) and the proceeds thereof shall be
paid directly to the Issuing Lender for application to the respective LOC
Obligations. Each such Lender hereby irrevocably agrees to make its pro rata
share of each such Revolving Loan immediately upon any such request or deemed
request in the amount, in the manner and on the date specified in the preceding
sentence notwithstanding (i) the amount of such borrowing may not comply with
---------------
the minimum amount for advances of Revolving Loans otherwise required hereunder,
(ii) whether any conditions specified in Section 5.2 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv) failure for any such
request or deemed request for Revolving Loan to be made by the time otherwise
required hereunder, (v) whether the date of such borrowing is a date on which
Revolving Loans are otherwise permitted to be made hereunder or (vi) any

29
<PAGE>

termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Loan
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower or any Credit Party), then each
such Lender hereby agrees that it shall forthwith purchase (as of the date such
borrowing would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase) from the
Issuing Lender such participation in the outstanding LOC Obligations as shall be
necessary to cause each such Lender to share in such LOC Obligations ratably
(based upon the respective Commitment Percentages of the Lenders (determined
before giving effect to any termination of the Commitments pursuant to Section
9.2)), provided that in the event such payment is not made on the day of
drawing, such Lender shall pay in addition to the Issuing Lender interest on the
amount of its unfunded Participation Interest at a rate equal to, if paid within
two (2) Business Days of the date of drawing, the Federal Funds Rate, and
thereafter at the Base Rate.

(e) Designation of other Credit Parties as Account Parties.
------------------------------------------------------
Notwithstanding anything to the contrary set forth in this Credit Agreement,
including without limitation Section 2.2(a)(ii) hereof, a Letter of Credit
issued hereunder may contain a statement to the effect that such Letter of
Credit is issued for the account of a Credit Party other than the Borrower,
provided that notwithstanding such statement, the Borrower shall be the actual
account party for all purposes of this Credit Agreement for such Letter of
Credit and such statement shall not affect the Borrower's reimbursement
obligations hereunder with respect to such Letter of Credit.

(f) Renewal, Extension. The renewal or extension of any Letter of Credit
------------------
shall, for purposes hereof, be treated in all respects the same as the issuance
of a new Letter of Credit hereunder.

(g) Uniform Customs and Practices. The Issuing Lender may have the Letters
-----------------------------
of Credit be subject to The Uniform Customs and Practice for Documentary Credits
(the "UCP") or the International Standby Practices 1998 (the "ISP98"), in either
case as published as of the date of issue by the International Chamber of
Commerce, in which case the UCP or the ISP98, as applicable, may be incorporated
therein and deemed in all respects to be a part thereof.

(h) Indemnification; Nature of Issuing Lender's Duties.
--------------------------------------------------

(i) In addition to its other obligations under this Section 2.6, the
Borrower hereby agrees to protect, indemnify, pay and save the Issuing
Lender harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of the Issuing Lender to honor a drawing under a
Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions, herein called
"Government Acts").
---------------

30
<PAGE>

(ii) As between the Borrower and the Issuing Lender, the Borrower
shall assume all risks of the acts, omissions or misuse of any Letter of Credit
by the beneficiary thereof. The Issuing Lender shall not be responsible: (A) for
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B) for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (C) for errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (D) for any
loss or delay in the transmission or otherwise of any document required in order
to make a drawing under a Letter of Credit or of the proceeds thereof; and (E)
for any consequences arising from causes beyond the control of the Issuing
Lender, including, without limitation, any Government Acts. None of the above
shall affect, impair, or prevent the vesting of the Issuing Lender's rights or
powers hereunder.

(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by the
Issuing Lender, under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put such Issuing
Lender under any resulting liability to the Borrower or any other Credit Party.
It is the intention of the parties that this Credit Agreement shall be construed
and applied to protect and indemnify the Issuing Lender against any and all
risks involved in the issuance of the Letters of Credit, all of which risks are
hereby assumed by the Borrower (on behalf of itself and each of the other Credit
Parties), including, without limitation, any and all Government Acts. The
Issuing Lender shall not, in any way, be liable for any failure by the Issuing
Lender or anyone else to pay any drawing under any Letter of Credit as a result
of any Government Acts or any other cause beyond the control of the Issuing
Lender.

(iv) Nothing in this subsection (h) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (d) above. The
obligations of the Borrower under this subsection (h) shall survive the
termination of this Credit Agreement. No act or omissions of any current or
prior beneficiary of a Letter of Credit shall in any way affect or impair the
rights of the Issuing Lender to enforce any right, power or benefit under this
Credit Agreement.

(v) Notwithstanding anything to the contrary contained in this
subsection (h), the Borrower shall have no obligation to indemnify the Issuing
Lender in respect of any liability incurred by the Issuing Lender (A) arising
solely out of the gross negligence or willful misconduct of the Issuing Lender,
as determined by a court of competent jurisdiction, or (B) caused by the Issuing
Lender's failure to pay under any Letter of Credit after presentation to it of a
request strictly complying with the terms and conditions of such Letter of
Credit, as determined by a court of competent jurisdiction, unless such payment
is prohibited by any law, regulation, court order or decree.

31
<PAGE>

(i) Responsibility of Issuing Lender. It is expressly understood and agreed
--------------------------------
that the obligations of the Issuing Lender hereunder to the Lenders are only
those expressly set forth in this Credit Agreement and that the Issuing Lender
shall be entitled to assume that the conditions precedent set forth in Section
5.2 have been satisfied unless it shall have acquired actual knowledge that any
such condition precedent has not been satisfied; provided, however, that nothing
-------- -------
set forth in this Section 2.6 shall be deemed to prejudice the right of any
Lender to recover from the Issuing Lender any amounts made available by such
Lender to the Issuing Lender pursuant to this Section 2.6 in the event that it
is determined by a court of competent jurisdiction that the payment with respect
to a Letter of Credit constituted gross negligence or willful misconduct on the
part of the Issuing Lender.

(j) Conflict with LOC Documents. In the event of any conflict between this
---------------------------
Credit Agreement and any LOC Document (including any letter of credit
application), this Credit Agreement shall control.

2.7 Additional Provisions relating to Swingline Loans.
-------------------------------------------------

The Swingline Lender may, at any time, in its sole discretion, by written
notice to the Borrower and the Lenders, demand repayment of its Swingline Loans
by way of a Revolving Loan advance, in which case the Borrower shall be deemed
to have requested a Revolving Loan advance comprised solely of Base Rate Loans
in the amount of such Swingline Loans; provided, however, that any such demand
-------- -------
shall be deemed to have been given one Business Day prior to the Termination
Date and on the date of the occurrence of any Event of Default described in
Section 9.1 and upon acceleration of the indebtedness hereunder and the exercise
of remedies in accordance with the provisions of Section 9.2. Each Lender
hereby irrevocably agrees to make its Revolving Commitment Percentage of each
such Revolving Loan in the amount, in the manner and on the date specified in
the preceding sentence notwithstanding (I) the amount of such borrowing may not
---------------
comply with the minimum amount for advances of Revolving Loans otherwise
required hereunder, (II) whether any conditions specified in Section 5.2 are
then satisfied, (III) whether a Default or an Event of Default then exists, (IV)
failure of any such request or deemed request for Revolving Loan to be made by
the time otherwise required hereunder, (V) whether the date of such borrowing is
a date on which Revolving Loans are otherwise permitted to be made hereunder or
(VI) any termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Loan
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower or any other Credit Party), then
each Lender hereby agrees that it shall forthwith purchase (as of the date such
borrowing would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase) from the
Swingline Lender such Participation Interests in the outstanding Swingline Loans
as shall be necessary to cause each such Lender to share in such Swingline Loans
ratably based upon its Revolving Commitment Percentage of the Aggregate
Revolving Committed Amount (determined before giving effect to any termination
of the Commitments pursuant to Section 3.4), provided that (A) all interest
--------
payable on the Swingline Loans shall be for the account of the Swingline Lender
until the date as of which the respective Participation Interest is funded and
(B) at the time any purchase of Participation Interests pursuant to this
sentence is actually made, the purchasing Lender shall be required to pay to the
Swingline

32
<PAGE>

Lender, to the extent not paid to the Swingline Lender by the Borrower in
accordance with the terms of Section 2.4(b), interest on the principal amount of
Participation Interests purchased for each day from and including the day upon
which such borrowing would otherwise have occurred to but excluding the date of
payment for such Participation Interests, at the rate equal to the Federal Funds
Rate.

SECTION 3

OTHER PROVISIONS RELATING TO CREDIT FACILITIES
----------------------------------------------

3.1 Default Rate.
------------

Upon the occurrence, and during the continuance, of an Event of Default,
(i) the principal of and, to the extent permitted by law, interest on the Loans
and any other amounts owing hereunder or under the other Credit Documents shall
bear interest, payable on demand, at a per annum rate 2% greater than the rate
which would otherwise be applicable (or if no rate is applicable, whether in
respect of interest, fees or other amounts, then the Adjusted Base Rate plus 2%)
----
and (ii) the Standby Letter of Credit Fee shall accrue at a per annum rate 2%
greater than the rate which would otherwise be applicable.

3.2 Extension and Conversion.
------------------------

The Borrower shall have the option, on any Business Day, to extend existing
Loans into a subsequent permissible Interest Period or to convert Loans into
Loans of another interest rate type; provided, however, that (i) except as
-------- -------
provided in Section 3.8, Eurodollar Loans may be converted into Base Rate Loans
or extended as Eurodollar Loans for new Interest Periods only on the last day of
the Interest Period applicable thereto, (ii) without the consent of the Required
Lenders, Eurodollar Loans may be extended, and Base Rate Loans may be converted
into Eurodollar Loans, only if the conditions precedent set forth in Section 5.2
are satisfied on the date of Continuation or Conversion, (iii) Loans extended
as, or converted into, Eurodollar Loans shall be subject to the terms of the
definition of "Interest Period" and shall be in such minimum amounts as provided
---------------
in Section 2.2(b), (iv) no more than ten (10) Eurodollar Loans which comprise
Revolving Loans shall be outstanding hereunder at any time (it being understood
that, for purposes hereof, Eurodollar Loans with different Interest Periods
shall be considered as separate Eurodollar Loans, even if they begin on the same
date, although borrowings, Continuations and Conversions may, in accordance with
the provisions hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period) and (v) any
request for Continuation or Conversion of a Eurodollar Loan which shall fail to
specify an Interest Period shall be deemed to be a request for an Interest
Period of one month. Each such Continuation or Conversion shall be effected by
the Borrower by giving a Notice of Extension/Conversion (or telephonic notice
promptly confirmed in writing) to the office of the Administrative Agent
specified in Section 11.1, or at such other office as the Administrative Agent
may designate in writing, prior to 11:00 A.M. (Charlotte, North Carolina time)
on the Business Day of, in the case of the Conversion of a Eurodollar Loan into
a Base Rate Loan, and on the third Business Day prior to, in the case of the
Continuation of a Eurodollar Loan as, or Conversion of a Base Rate Loan into, a
Eurodollar Loan, the date of the

33
<PAGE>

proposed Continuation or Conversion, specifying the date of the proposed
Continuation or Conversion, the Loans to be so extended or converted, the types
of Loans into which such Loans are to be converted and, if appropriate, the
applicable Interest Periods with respect thereto. Each request for Continuation
or Conversion shall be irrevocable and shall constitute a representation and
warranty by the Borrower of the matters specified in subsections (a), (b), (c),
(d) and (e) of Section 5.2. In the event the Borrower fails to request
Continuation or Conversion of any Eurodollar Loan in accordance with this
Section, or any such Conversion or Continuation is not permitted or required by
this Section, then such Eurodollar Loan shall be automatically converted into a
Base Rate Loan at the end of the Interest Period applicable thereto. The
Administrative Agent shall give each Lender notice as promptly as practicable of
any such proposed Continuation or Conversion affecting any Loan.

3.3 Prepayments.
-----------

(a) Voluntary Prepayments. The Loans may be repaid in whole or in part
---------------------
without premium or penalty; provided that (i) Eurodollar Loans may be prepaid
--------
only upon three (3) Business Days' prior written notice to the Administrative
Agent and must be accompanied by payment of any amounts owing under Section
3.12, and (ii) partial prepayments shall be minimum principal amounts of
$5,000,000, in the case of Eurodollar Loans, and $1,000,000, in the case of Base
Rate Loans, and in integral multiples of $250,000 in excess thereof.

(b) Mandatory Prepayments. If at any time, (i) the aggregate principal
---------------------
amount of Obligations shall exceed the Aggregate Revolving Committed Amount,
(ii) the aggregate amount of LOC Obligations shall exceed the LOC Committed
Amount or (iii) the aggregate principal amount of Swingline Loans shall exceed
the Swingline Committed Amount, the Borrower shall immediately make payment on
the Revolving Loans, on the Swingline Loans and/or to a cash collateral account
in respect of the LOC Obligations, in an amount sufficient to eliminate the
excess.

(c) Application. Unless otherwise specified by the Borrower, prepayments
-----------
on the Obligations shall be applied first to Prime Rate Swingline Loans, then to
Base Rate Loans and then to Eurodollar Loans in direct order of Interest Period
maturities.

3.4 Reduction and Termination of Commitments.
----------------------------------------

(a) Voluntary Reduction of Commitments. The Commitments may be terminated
----------------------------------
or permanently reduced in whole or in part upon three (3) Business Days' prior
written notice to the Administrative Agent, provided that (i) after giving
--------
effect to any voluntary reduction the aggregate amount of Obligations shall not
exceed the Aggregate Revolving Committed Amount, as reduced, and (ii) partial
reductions shall be in a minimum principal amount of $5,000,000, and in integral
multiples of $1,000,000 in excess thereof.

(b) Termination of Commitments. The Commitments hereunder shall terminate
--------------------------
on the Termination Date.

34
<PAGE>

3.5 Fees.
----

(a) Commitment Fee. In consideration of the Revolving Commitments
--------------
hereunder, the Borrower agrees to pay to the Administrative Agent for the
ratable benefit of the Lenders a commitment fee (the "Commitment Fee") for the
--------------
period from the Closing Date to the Termination Date equal to (i) during any
period that the unused amount of the Aggregate Revolving Committed Amount is
greater than fifty percent (50%) of the Aggregate Revolving Committed Amount,
the Applicable Percentage per annum on the average daily unused amount of the
Aggregate Revolving Committed Amount for the applicable period and (ii) during
any period that the unused amount of the Aggregate Revolving Committed Amount is
less than or equal to fifty percent (50%) of the Aggregate Revolving Committed
Amount, the sum of the Applicable Percentage plus twenty-five basis points
(0.25%) per annum on the average daily unused amount of the Aggregate Revolving
Committed Amount for the applicable period. The Commitment Fee shall be payable
quarterly in arrears on the last Business Day of each March, June, September and
December for the immediately preceding quarter (or a portion thereof) beginning
with the first such date to occur after the Closing Date and on the Termination
Date. For purposes of computation of the Commitment Fee, Swingline Loans shall
not be counted toward or considered usage under the Aggregate Revolving
Committed Amount.

(b) Letter of Credit Fees.
---------------------

(i) Standby Letter of Credit Issuance Fee. In consideration of the
-------------------------------------
issuance of standby Letters of Credit hereunder, the Borrower promises to
pay to the Administrative Agent for the account of each Lender a fee (the
"Standby Letter of Credit Fee") on such Lender's Revolving Commitment
----------------------------
Percentage of the average daily maximum amount available to be drawn under
each such standby Letter of Credit computed at a per annum rate for each
day from the date of issuance to and including the date of expiration equal
to the Applicable Percentage. The Standby Letter of Credit Fee shall be
payable quarterly in arrears on the last Business Day of each March, June,
September and December for the immediately preceding quarter (or a portion
thereof) beginning with the first such date to occur after the Closing Date
and on the Termination Date.

(ii) Issuing Lender Fees. In addition to the Standby Letter of Credit
-------------------
Fee, the Borrower promises to pay to the Administrative Agent for the
account of the Issuing Lender without sharing by the other Lenders (i) a
letter of credit fronting fee of one-eighth of one percent (0.125%) on the
average daily maximum amount available to be drawn under each Letter of
Credit computed at a per annum rate for each day from the date of issuance
to the date of expiration and (ii) the customary charges from time to time
of the Issuing Lender with respect to the issuance, amendment, transfer,
administration, cancellation and conversion of, and drawings under, such
Letters of Credit. The fronting fee shall be payable upon the issuance of
each Letter of Credit and the customary charges shall be payable upon
demand by the Issuing Lender.

(c) Administrative Fees. The Borrower agrees to pay to the Administrative
-------------------
Agent, for its own account, the fees referred to in the Administrative Agent's
Fee Letter (the "Administrative Agent's Fees").
---------------------------

35
<PAGE>

3.6 Capital Adequacy.
----------------

If any Lender has determined, after the date hereof, that the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable law, rule or regulation regarding capital adequacy, or compliance by
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's (including, for purposes hereof, the parent company of such Lender)
capital or assets as a consequence of its commitments or obligations hereunder
to a level below that which such Lender could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Lender's policies with respect to capital adequacy), then, upon notice from such
Lender to the Borrower, the Borrower shall be obligated to pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction. Such notice shall be accompanied by a statement as to the amount of
such compensation and include a reasonably detailed summary of the basis for
such demand with reasonably detailed calculations. Each determination by any
such Lender of amounts owing under this Section shall, absent manifest error, be
conclusive and binding on the parties hereto.

3.7 Limitation on Eurodollar Loans.
------------------------------

If on or prior to the first day of any Interest Period for any Eurodollar
Loan:

(a) the Administrative Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar
Rate for such Interest Period; or

(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Administrative Agent that the Eurodollar Rate
will not adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Loans for such Interest Period;

then the Administrative Agent shall give the Borrower prompt notice thereof, and
so long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Eurodollar Loans, Continue Eurodollar Loans, or to
Convert Base Rate Loans into Eurodollar Loans.

3.8 Illegality.
----------

Notwithstanding any other provision of this Credit Agreement, in the event
that it becomes unlawful for any Lender (or its Applicable Lending Office) to
make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable).

36
<PAGE>

3.9 Requirements of Law.
-------------------

If, after the date hereof, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:

(i) shall impose, modify, or deem applicable any reserve, special
deposit, assessment, or similar requirement (other than the Eurodollar
Reserve Requirement utilized in the determination of the Adjusted
Eurodollar Rate) relating to any extensions of credit or other assets of,
or any deposits with or other liabilities or commitments of, such Lender
(or its Applicable Lending Office), including the Commitment of such Lender
hereunder; or

(ii) shall impose on such Lender (or its Applicable Lending Office)
or the London interbank market any other condition affecting this Credit
Agreement or its Notes or any of such extensions of credit or liabilities
or commitments;

and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.9, the Borrower may, by notice to such Lender
(with a copy to the Administrative Agent), suspend the obligation of such Lender
to make or Continue Eurodollar Loans, or to Convert Base Rate Loans into
Eurodollar Loans, until the event or condition giving rise to such request
ceases to be in effect (in which case the provisions of Section 3.10 shall be
applicable); provided that such suspension shall not affect the right of such
--------
Lender to receive the compensation so requested. Each Lender shall promptly
notify the Borrower and the Administrative Agent of any event of which it has
knowledge, occurring after the date hereof, which will entitle such Lender to
compensation pursuant to this Section 3.9 and will designate a different
Applicable Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Lender,
be otherwise disadvantageous to it. Any Lender claiming compensation under this
Section 3.9 shall furnish to the Borrower and the Administrative Agent a
statement setting forth the additional amount or amounts to be paid to it
hereunder (including a reasonably detailed summary of the basis for such amounts
with reasonably detailed calculations) which shall be conclusive in the absence
of manifest error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.

3.10 Treatment of Affected Loans.
---------------------------

If the obligation of any Lender to make any Eurodollar Loan or to Continue,
or to Convert Base Rate Loans into, Eurodollar Loans shall be suspended pursuant
to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans shall be
automatically Converted into Base Rate Loans on the last

37
<PAGE>

day(s) of the then current Interest Period(s) for such Eurodollar Loans (or, in
the case of a Conversion required by Section 3.8 hereof, on such earlier date as
such Lender may specify to the Borrower with a copy to the Administrative Agent)
and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to such
Conversion no longer exist:

(a) to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Eurodollar Loans shall be applied instead to
its Base Rate Loans; and

(b) all Loans that would otherwise be made or Continued by such
Lender as Eurodollar Loans shall be made or Continued instead as Base Rate
Loans, and all Base Rate Loans of such Lender that would otherwise be
Converted into Eurodollar Loans shall remain as Base Rate Loans.

If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 3.8 or 3.9 hereof that gave
rise to the Conversion of such Lender's Eurodollar Loans pursuant to this
Section 3.10 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding Eurodollar Loans and by
such Lender are held pro rata (as to principal amounts, interest rate basis, and
Interest Periods) in accordance with their respective Commitments.

3.11 Taxes.
-----

(a) Any and all payments by any Credit Party to or for the account of any
Lender (whether or not a signatory hereof) or the Administrative Agent hereunder
or under any other Credit Document shall be made free and clear of and without
deduction for any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Administrative Agent, taxes
- ---------
imposed on its income or gross receipts, and franchise taxes imposed on it, by
the jurisdiction under the laws of which such Lender (or its Applicable Lending
Office) or the Administrative Agent (as the case may be) is organized or
conducts business, or any political subdivision thereof (all such non-excluded
taxes, duties, levies, imposts, deductions, charges, withholdings, and
liabilities being hereinafter referred to as "Taxes"). If any Credit Party shall
-----
be required by law to deduct or withhold any Taxes from or in respect of any sum
payable under this Credit Agreement or any other Credit Document to any Lender
or the Administrative Agent, (i) the sum payable shall be increased as necessary
so that after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable under this
Section 3.11) such Lender or the Administrative Agent receives an amount equal
to the sum it would have received had no such deductions been made, (ii) such
Credit Party shall make such deductions and withholdings, (iii) such Credit
Party shall pay the full amount deducted or withheld to the relevant taxation
authority or other authority in accordance with applicable law, and (iv) such
Credit Party shall furnish to the

38
<PAGE>

Administrative Agent, at its address referred to in Section 11.1, the original
or a certified copy of a receipt evidencing payment thereof.

(b) In addition, the Borrower agrees to pay any and all present or future
stamp or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under this Credit Agreement or
any other Credit Document or from the execution or delivery of, or otherwise
with respect to, this Credit Agreement or any other Credit Document (hereinafter
referred to as "Other Taxes").
-----------

(c) The Borrower agrees to indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 3.11) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect thereto,
except with respect to any Lender or the Administrative Agent, as the case may
be, for such liability arising from such Lender's or the Administrative Agent's,
as the case may be, gross negligence or willful misconduct.

(d) Each Lender that is not a United States person under Section
7701(a)(30) of the Internal Revenue Code, on or prior to the date of its
execution and delivery of this Credit Agreement in the case of each Lender
listed on the signature pages hereof and on or prior to the date on which it
becomes a Lender in the case of each other Lender, and from time to time
thereafter if requested in writing by the Borrower or the Administrative Agent
(but only so long as such Lender remains lawfully able to do so), shall provide
the Borrower and the Administrative Agent with (i) Internal Revenue Service Form
1001 or 4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party which reduces to zero
the rate of withholding tax on payments of interest or certifying that the
income receivable pursuant to this Credit Agreement is effectively connected
with the conduct of a trade or business in the United States, (ii) Internal
Revenue Service Form W-8 or W-9, as appropriate, or any successor form
prescribed by the Internal Revenue Service, (iii) any other form or certificate
required by any taxing authority (including any certificate required by Sections
871(h) and 881(c) of the Internal Revenue Code), certifying that such Lender is
entitled to an exemption from tax on payments pursuant to this Credit Agreement
or any of the other Credit Documents and/or (iv) any other forms or documents
relating to the status of such Lender reasonably requested by the Borrower.

(e) For any period with respect to which a Lender has failed to provide
the Borrower and the Administrative Agent with the appropriate form pursuant to
Section 3.11(d) (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), then, notwithstanding any other provision of this
Section 3.11, such Lender shall not be entitled to additional payment or
indemnification under Section 3.11(a), 3.11(b) or 3.11(c) with respect to Taxes
imposed by the United States; provided, however, that should a Lender, which is
-------- -------
otherwise exempt from or subject to a reduced rate of withholding tax, become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Lender shall reasonably request to
assist such Lender to recover such Taxes.

39
<PAGE>

(f) If any Credit Party is required to pay additional amounts to or for
the account of any Lender pursuant to this Section 3.11, then such Lender will
agree to use reasonable efforts to change the jurisdiction of its Applicable
Lending Office so as to eliminate or reduce any such additional payment which
may thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.

(g) Within thirty (30) days after the date of any payment of Taxes, the
applicable Credit Party shall furnish to the Administrative Agent the original
or a certified copy of a receipt evidencing such payment.

(h) Without prejudice to the survival of any other agreement of the Credit
Parties hereunder, the agreements and obligations of the Credit Parties
contained in this Section 3.11 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.

3.12 Compensation.
------------

Upon the request of any Lender, the Borrower shall pay to such Lender such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost, or expense (including loss of
anticipated profits) incurred by it as a result of:

(a) any payment, prepayment, or Conversion of a Eurodollar Loan for
any reason (including, without limitation, (i) in connection with any
assignment by Bank of America pursuant to Section 11.3(b) as part of the
primary syndication of the Loans during the 90-day period immediately
following the Closing Date and (ii) the acceleration of the Loans pursuant
to Section 9.2) on a date other than the last day of the Interest Period
for such Loan; or

(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Section 5
to be satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Loan
on the date for such borrowing, Conversion, Continuation, or prepayment
specified in the relevant notice of borrowing, prepayment, Continuation, or
Conversion under this Credit Agreement.

With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, Converted or Continued,
for the period from the date of such prepayment or of such failure to borrow,
Convert or Continue to the last day of the applicable Interest Period (or, in
the case of a failure to borrow, Convert or Continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Eurodollar Loans provided for herein (excluding,
however, the Applicable Percentage included therein, if any) over (b) the amount
of interest (as reasonably determined by such Lender) which would have accrued
to such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank Eurodollar market. The covenants of
the Borrower set forth in this

40
<PAGE>

Section 3.12 shall survive the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder.

3.13 Pro Rata Treatment.
------------------

Except to the extent otherwise provided herein:

(a) Loans and Letters of Credit. Each Revolving Loan advance, each
---------------------------
payment or prepayment of principal of any Revolving Loan (other than
Swingline Loans) or reimbursement obligations arising from drawings under
Letters of Credit, each payment of interest on the Revolving Loans or
reimbursement obligations arising from drawings under Letters of Credit,
each payment of Commitment Fees, each payment of the Standby Letter of
Credit Fee, each reduction of the Aggregate Revolving Committed Amount and
each conversion or extension of any Revolving Loan (other than Swingline
Loans), shall be allocated pro rata among the Lenders in accordance with
the respective Revolving Commitment Percentages.

(b) Advances. No Lender shall be responsible for the failure or
--------
delay by any other Lender in its obligation to make its ratable share of a
borrowing hereunder; provided, however, that the failure of any Lender to
-------- -------
fulfill its obligations hereunder shall not relieve any other Lender of its
obligations hereunder. Unless the Administrative Agent shall have been
notified by any Lender prior to the date of any requested borrowing that
such Lender does not intend to make available to the Administrative Agent
its ratable share of such borrowing to be made on such date, the
Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on the date of such borrowing, and
the Administrative Agent in reliance upon such assumption, may (in its sole
discretion but without any obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent, the Administrative Agent
shall be able to recover such corresponding amount from such Lender. If
such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent will
promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent
shall also be entitled to recover from the Lender or the Borrower, as the
case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount
is recovered by the Administrative Agent at a per annum rate equal to (i)
from the Borrower at the applicable rate for the applicable borrowing
pursuant to the Notice of Borrowing and (ii) from a Lender, if paid within
two (2) Business Days of the date such amount was made available by the
Administrative Agent to the Borrower, the Federal Funds Rate and thereafter
at a rate equal to the Base Rate

3.14 Sharing of Payments.
-------------------

The Lenders agree among themselves that, in the event that any Lender shall
obtain payment in respect of any Loan, LOC Obligations or any other obligation
owing to such Lender

41
<PAGE>

under this Credit Agreement through the exercise of a right of setoff, banker's
lien or counterclaim, or pursuant to a secured claim under Section 506 of Title
11 of the United States Code or other security or interest arising from, or in
lieu of, such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other means,
in excess of its pro rata share of such payment as provided for in this Credit
Agreement, such Lender shall promptly purchase from the other Lenders a
Participation Interest in such Loans, LOC Obligations and other obligations in
such amounts, and make such other adjustments from time to time, as shall be
equitable to the end that all Lenders share such payment in accordance with
their respective ratable shares as provided for in this Credit Agreement. The
Lenders further agree among themselves that if payment to a Lender obtained by
such Lender through the exercise of a right of setoff, banker's lien,
counterclaim or other event as aforesaid shall be rescinded or must otherwise be
restored, each Lender which shall have shared the benefit of such payment shall,
by repurchase of a Participation Interest theretofore sold, return its share of
that benefit (together with its share of any accrued interest payable with
respect thereto) to each Lender whose payment shall have been rescinded or
otherwise restored. The Borrower agrees that any Lender so purchasing such a
Participation Interest may, to the fullest extent permitted by law, exercise all
rights of payment, including setoff, banker's lien or counterclaim, with respect
to such Participation Interest as fully as if such Lender were a holder of such
Loan, LOC Obligations or other obligation in the amount of such Participation
Interest. Except as otherwise expressly provided in this Credit Agreement, if
any Lender or the Administrative Agent shall fail to remit to the Administrative
Agent or any other Lender an amount payable by such Lender or the Administrative
Agent to the Administrative Agent or such other Lender pursuant to this Credit
Agreement on the date when such amount is due, such payments shall be made
together with interest thereon for each date from the date such amount is due
until the date such amount is paid to the Administrative Agent or such other
Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.14 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.14 to share in the benefits of any recovery on such secured claim.

3.15 Payments, Computations, Etc.
---------------------------

(a) Generally. Except as otherwise specifically provided herein, all
---------
payments hereunder shall be made to the Administrative Agent in Dollars in
immediately available funds, without setoff, deduction, counterclaim or
withholding of any kind, at the Administrative Agent's office specified in
Section 11.1 not later than 2:00 P.M. (Charlotte, North Carolina time) on the
date when due. Payments received after such time shall be deemed to have been
received on the next succeeding Business Day. The Administrative Agent may (but
shall not be obligated to) debit the amount of any such payment which is not
made by such time to any ordinary deposit account of the Borrower or any other
Credit Party maintained with the Administrative Agent (with notice to the
Borrower or such other Credit Party). The Borrower shall, at the time it makes
any payment under this Credit Agreement, specify to the Administrative Agent the
Loans, LOC Obligations, Fees, interest or other amounts payable by the Borrower
hereunder to which such payment is to be applied (and in the event that it fails
so to specify, or if such application would be inconsistent with the terms
hereof, the Administrative Agent shall distribute such payment to the Lenders in
such manner as the Administrative Agent may determine to be appropriate in
respect of obligations

42
<PAGE>

owing by the Borrower hereunder, subject to the terms of Section 3.13(a)). The
Administrative Agent will distribute such payments to such Lenders, if any such
payment is received prior to 2:00 P.M. (Charlotte, North Carolina time) on a
Business Day in like funds as received prior to the end of such Business Day and
otherwise the Administrative Agent will distribute such payment to such Lenders
on the next succeeding Business Day. Whenever any payment hereunder shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day (subject to accrual of
interest and Fees for the period of such extension), except that in the case of
Eurodollar Loans, if the extension would cause the payment to be made in the
next following calendar month, then such payment shall instead be made on the
next preceding Business Day. Except as expressly provided otherwise herein, all
computations of interest and fees shall be made on the basis of actual number of
days elapsed over a year of 360 days. Interest shall accrue from and include the
date of borrowing, but exclude the date of payment.

(b) Allocation of Payments After Event of Default. Notwithstanding any
---------------------------------------------
other provisions of this Credit Agreement to the contrary, after the occurrence
and during the continuance of an Event of Default, all amounts collected or
received on or in respect of the Obligations (or other amounts owing under the
Credit Documents in connection therewith) shall be paid over or delivered as
follows:

FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of
the Administrative Agent in connection with enforcing the rights and
remedies of the Lenders under the Credit Documents made with respect
thereto;

SECOND, to payment of any fees owed to the Administrative
Agent;

THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of
each of the Lenders hereunder in connection with enforcing its rights
under the Credit Documents or otherwise with respect to the
Obligations owing to such Lender;

FOURTH, to the payment of all accrued interest and fees on or
in respect of the Obligations;

FIFTH, to the payment of the outstanding principal amount of
the Obligations hereunder (including the payment or cash
collateralization of the outstanding LOC Obligations);

SIXTH, to all other Obligations hereunder and other obligations
which shall have become due and payable under the Credit Documents
otherwise and not repaid pursuant to clauses "FIRST" through "SIXTH"
above; and

SEVENTH, to the payment of the surplus, if any, to the
Borrower.

In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (ii) except

43
<PAGE>

as otherwise provided, the Lenders shall receive amounts ratably in
accordance with their respective pro rata share (based on the proportion
that the then outstanding Obligations held by such Lenders bears to the
aggregate amount of Obligations then outstanding) of amounts available to
be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH"
above; and (iii) to the extent that any amounts available for distribution
pursuant to clause "FIFTH" above are attributable to the issued but undrawn
amount of outstanding Letters of Credit, such amounts shall be held by the
Administrative Agent in a cash collateral account and applied (A) first, to
reimburse the Issuing Lender for any drawings under such Letters of Credit
and (B) then, following the expiration of all Letters of Credit, to all
other obligations of the types described in clauses "FOURTH" and "FIFTH"
above in the manner provided in this Section 3.15(b).

3.16 Evidence of Debt.
----------------

(a) Each Lender shall maintain an account or accounts evidencing each Loan
made by such Lender to the Borrower from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Credit Agreement. Each Lender will make reasonable efforts to maintain the
accuracy of its account or accounts and to promptly update its account or
accounts from time to time, as necessary.

(b) The Administrative Agent shall maintain the Register pursuant to
Section 11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and Interest
Period of each such Loan hereunder, (ii) the amount of any principal or interest
due and payable or to become due and payable to each Lender hereunder and (iii)
the amount of any sum received by the Administrative Agent hereunder from or for
the account of any Credit Party and each Lender's share thereof. The
Administrative Agent will make reasonable efforts to maintain the accuracy of
the subaccounts referred to in the preceding sentence and to promptly update
such subaccounts from time to time, as necessary.

(c) The entries made in the accounts, Register and subaccounts maintained
pursuant to subsection (b) of this Section 3.16 (and, if consistent with the
entries of the Administrative Agent, subsection (a)) shall be prima facie
evidence of the existence and amounts of the obligations of the Credit Parties
therein recorded; provided, however, that the failure of any Lender or the
-------- -------
Administrative Agent to maintain any such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner affect
the obligation of the Credit Parties to repay the Obligations and other amounts
owing to such Lender.

3.17 Certain Limitations.
-------------------

The provisions of Sections 3.6, 3.9 and 3.11 shall be subject to the
following:

(a) If any Lender requests compensation or indemnification from the
Borrower under Section 3.6, 3.9 or 3.11, then such Lender will agree to use
reasonable efforts to change the jurisdiction of its applicable lending office
so as to eliminate or reduce any such additional payment which may thereafter
accrue if such change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender.

44
<PAGE>

(b) If any Lender requests compensation or indemnification from the
Borrower under Section 3.6, 3.9 or 3.11, the Borrower may, at its option, so
long as no Event of Default shall have occurred and be continuing, obtain, at
the Borrower's expense, a replacement Lender for the affected Lender. If the
Borrower elects to obtain a replacement Lender for the affected Lender, the
Borrower shall within thirty (30) after the date of such request notify the
Administrative Agent and such affected Lender of its intention to replace the
affected Lender. If the Borrower obtains a replacement Lender within sixty (60)
days following notice of its intention to do so, the affected Lender must sell
and assign its Loans and Commitments to such replacement Lender pursuant to
Section 11.3 (without giving effect to any requirement therein that the
Administrative Agent consent thereto), for an amount equal to the principal
balance of all Loans held by the affected Lender and all accrued interest and
Fees with respect thereto through the date of such sale, provided that the
--------
Borrower shall have paid to such affected Lender the compensation or
indemnification that it is entitled to receive under Section 3.6, 3.9 or 3.11
through the date of such sale and assignment. Notwithstanding the foregoing, if
the Borrower (a) fails to give notice to the Administrative Agent and the
affected Lender of its intention to replace the affected Lender within thirty
(30) days after the Lender requests compensation or indemnification, or (b)
timely gives notice to the Administrative Agent and the affected Lender of its
intention to replace such affected Lender but does not so replace such affected
Lender within sixty (60) days following such notice, then in each case the
Borrower's rights under this Section 3.17 to replace such Lender for the
particular circumstances shall terminate.

SECTION 4

GUARANTY
--------

4.1 The Guaranty.
------------

Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each affiliate of a Lender that enters into a Hedging Agreement relating
to the Obligations, and the Administrative Agent, as hereinafter provided, as
primary obligor and not as surety, the prompt payment of the Guaranteed
Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise)
strictly in accordance with the terms thereof. The Guarantors hereby further
agree that if any of the Guaranteed Obligations are not paid in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as a
mandatory cash collateralization or otherwise), the Guarantors will, jointly and
severally, promptly pay the same, without any demand or notice whatsoever, and
that in the case of any extension of time of payment or renewal of any of the
Guaranteed Obligations, the same will be promptly paid in full when due (whether
at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory
cash collateralization or otherwise) in accordance with the terms of such
extension or renewal.

Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor under this Credit Agreement and the other Credit Documents shall be
limited to an aggregate amount equal to the

45
<PAGE>

largest amount that would not render such obligations subject to avoidance under
Section 548 of the Bankruptcy Code or any comparable provisions of any
applicable state law.

4.2 Obligations Unconditional.
-------------------------

The obligations of the Guarantors under Section 4.1 are joint and several,
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor
shall have no right of subrogation, indemnity, reimbursement or contribution
against the Borrower or any other Guarantor for amounts paid under this Section
4 until such time as the Lenders (and any affiliates of Lenders entering into
Hedging Agreements) have been paid in full in respect of all Guaranteed
Obligations, all Commitments under this Credit Agreement have been terminated
and no Person or Governmental Authority shall have any right to request any
return or reimbursement of funds from the Lenders in connection with monies
received under the Credit Documents or Hedging Agreements between any member of
the Consolidated Group and any Lender, or any affiliate of a Lender. Without
limiting the generality of the foregoing, it is agreed that, to the fullest
extent permitted by law, the occurrence of any one or more of the following
shall not alter or impair the liability of any Guarantor hereunder which shall
remain absolute and unconditional as described above:

(a) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;

(b) any of the acts mentioned in any of the provisions of any of
the Credit Documents, any Hedging Agreement between any member of the
Consolidated Group and any Lender, or any affiliate of a Lender, or any
other agreement or instrument referred to in the Credit Documents or such
Hedging Agreements shall be done or omitted;

(c) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement between any member of the
Consolidated Group and any Lender, or any affiliate of a Lender, or any
other agreement or instrument referred to in the Credit Documents or such
Hedging Agreements shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released, impaired
or exchanged in whole or in part or otherwise dealt with;

(d) any of the Guaranteed Obligations shall be determined to be
void or voidable (including, without limitation, for the benefit of any
creditor of any Guarantor) or

46
<PAGE>

shall be subordinated to the claims of any Person (including, without
limitation, any creditor of any Guarantor).

With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Administrative Agent or any Lender
exhaust any right, power or remedy or proceed against any Person under any of
the Credit Documents, any Hedging Agreement between any member of the
Consolidated Group and any Lender, or any affiliate of a Lender, or any other
agreement or instrument referred to in the Credit Documents or such Hedging
Agreements, or against any other Person under any other guarantee of, or
security for, any of the Guaranteed Obligations.

4.3 Reinstatement.
-------------

The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Guaranteed Obligations is rescinded
or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, fees and expenses of counsel) incurred
by the Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.

4.4 Certain Additional Waivers.
--------------------------

Each Guarantor agrees that such Guarantor shall have no right of recourse
to security for the Guaranteed Obligations, except through the exercise of
rights of subrogation pursuant to Section 4.2 and through the exercise of rights
of contribution pursuant to Section 4.6.

4.5 Remedies.
--------

The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, the Guaranteed Obligations may be declared to be
forthwith due and payable as provided in Section 9.2 (and shall be deemed to
have become automatically due and payable in the circumstances provided in said
Section 9.2) for purposes of Section 4.1 notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing the Guaranteed
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Guaranteed Obligations
being deemed to have become automatically due and payable), the Guaranteed
Obligations (whether or not due and payable by any other Person) shall forthwith
become due and payable by the Guarantors for purposes of Section 4.1.

4.6 Rights of Contribution.
----------------------

47
<PAGE>

The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the prior payment in full to the
Administrative Agent and the Lenders of the Guaranteed Obligations, and none of
the Guarantors shall exercise any right or remedy under this Section 4.6 against
any other Guarantor until payment and satisfaction in full of all of such
Guaranteed Obligations. For purposes of this Section 4.6, (a) "Guaranteed
----------
Obligations" shall mean any obligations arising under the other provisions of
- -----------
this Section 4; (b) "Excess Payment" shall mean the amount paid by any Guarantor
--------------
in excess of its Pro Rata Share of any Guaranteed Obligations; (c) "Pro Rata
--------
Share" shall mean, for any Guarantor in respect of any payment of Guaranteed
- -----
Obligations, the ratio (expressed as a percentage) as of the date of such
payment of Guaranteed Obligations of (i) the amount by which the aggregate
present fair salable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of all
of the Credit Parties exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of the Credit Parties hereunder) of the Credit
Parties; provided, however, that, for purposes of calculating the Pro Rata
-------- -------
Shares of the Guarantors in respect of any payment of Guaranteed Obligations,
any Guarantor that became a Guarantor subsequent to the date of any such payment
shall be deemed to have been a Guarantor on the date of such payment and the
financial information for such Guarantor as of the date such Guarantor became a
Guarantor shall be utilized for such Guarantor in connection with such payment;
and (d) "Contribution Share" shall mean, for any Guarantor in respect of any
------------------
Excess Payment made by any other Guarantor, the ratio (expressed as a
percentage) as of the date of such Excess Payment of (i) the amount by which the
aggregate present fair salable value of all of its assets and properties exceeds
the amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of the
Credit Parties other than the maker of such Excess Payment exceeds the amount of
all of the debts and liabilities (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of the Credit
Parties) of the Credit Parties other than the maker of such Excess Payment;
provided, however, that, for purposes of calculating the Contribution Shares of
- -------- -------
the Guarantors in respect of any Excess Payment, any Guarantor that became a
Guarantor subsequent to the date of any such Excess Payment shall be deemed to
have been a Guarantor on the date of such Excess Payment and the financial
information for such Guarantor as of the date such Guarantor became a Guarantor
shall be utilized for such Guarantor in connection with such Excess Payment.
This Section 4.6 shall not be deemed to affect any right of subrogation,
indemnity, reimbursement or contribution that any Guarantor may have under
applicable law against the Borrower in respect of any payment of Guaranteed
Obligations. Notwithstanding the foregoing, all rights of contribution against
any Guarantor shall terminate from and after such time, if ever, that such
Guarantor shall be relieved of its obligations pursuant to Section 8.4.

48
<PAGE>

4.7 Guarantee of Payment; Continuing Guarantee.
------------------------------------------

The guarantee in this Section 4 is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Guaranteed
Obligations whenever arising.

SECTION 5

CONDITIONS
----------

5.1 Closing Conditions.
------------------

The obligation of the Lenders to enter into this Credit Agreement and to
make the initial Extensions of Credit shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):

(a) Executed Credit Documents. Receipt by the Administrative
-------------------------
Agent of: (i) multiple counterparts of this Credit Agreement and (ii) a
Revolving Note for each Lender, in each case executed by a duly authorized
officer of each party thereto and in each case conforming to the
requirements of this Credit Agreement.

(b) Legal Opinions. Receipt by the Administrative Agent of
--------------
multiple counterparts of opinions of counsel for the Credit Parties
relating to the Credit Documents and the transactions contemplated
therein, in form and substance satisfactory to the Administrative Agent
and the Lenders, and including, among other things, opinions regarding
enforceability of the Credit Documents and the perfection of the security
interests created thereby.

(c) Financial Information. Receipt by the Lenders of such
---------------------
financial information regarding the members of the Consolidated Group as
may be requested by, and in each case in form and substance satisfactory
to, the Administrative Agent and the Lenders.

(d) Absence of Legal Proceedings. There shall not exist any
----------------------------
action, suit, investigation or proceeding pending in any court or before
any arbitrator or Governmental Authority which could reasonably be
expected to have a Material Adverse Effect.

(e) Corporate Documents. Receipt by the Administrative Agent of
-------------------
the following (or their equivalent) for each of the Credit Parties:

(i) Charter Documents. Copies of the articles or
-----------------
certificates of incorporation or other charter documents of such
Credit Party certified to be true and complete as of a recent date
by the appropriate Governmental Authority of the state or other
jurisdiction of its incorporation and certified by a secretary or
assistant secretary of such Credit Party to be true and correct as
of the Closing Date.

49
<PAGE>

(ii) Bylaws. A copy of the bylaws, operating agreement or
------
equivalent of such Credit Party certified by a secretary or
assistant secretary of such Credit Party to be true and correct and
in force and effect as of the Closing Date.

(iii) Resolutions. Copies of resolutions of the board of
-----------
directors of such Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated
therein and authorizing execution and delivery thereof, certified by
a secretary or assistant secretary of such Credit Party to be true
and correct and in force and effect as of the Closing Date.

(iv) Good Standing. (A) certificates of good standing,
-------------
existence or its equivalent certified as of a recent date by the
appropriate governmental authorities of the state of incorporation
and each other state in which the failure to so qualify and be in
good standing would be reasonably likely to have a material adverse
effect on the business or operations in such state and (B)
certificates indicating payment of all corporate franchise taxes
certified as of a recent date by the appropriate governmental taxing
authorities of the state of incorporation and each other state in
which the failure to pay corporate franchise taxes would be
reasonably likely to have a material adverse effect on the business
and operations in such state.

(v) Officer's Certificate. An officer's certificate for
---------------------
each of the Credit Parties dated as of the Closing Date
substantially in the form of Schedule 5.1(e)(v) with appropriate
------------------
insertions and attachments.

(f) Officer's Certificates. The Administrative Agent shall have
----------------------
received a certificate or certificates executed by an Executive Officer of
the Borrower as of the Closing Date, in form and substance satisfactory to
the Administrative Agent, stating that (A) each Credit Party is in
compliance with all existing financial obligations, (B) all governmental,
shareholder and third party consents and approvals, if any, with respect
to the Credit Documents and the transactions contemplated thereby have
been obtained, (C) no action, suit, investigation or proceeding is pending
or threatened in any court or before any arbitrator or governmental
instrumentality that purports to affect any Credit Party or any
transaction contemplated by the Credit Documents, if such action, suit,
investigation or proceeding could reasonably be expected to have a
Material Adverse Effect, and (D) immediately after giving effect to the
initial Loans made and Letters of Credit issued on the Closing Date, (1)
no Default or Event of Default exists, (2) all representations and
warranties contained herein and in the other Credit Documents are true and
correct in all material respects and (3) the Credit Parties are in pro
forma compliance with each of the financial covenants set forth in Section
7.11 (assuming for purposes hereof that such financial covenants were
measured as of, and for the 12-month period ending on, such date).

(g) Corporate Structure. Receipt by the Administrative Agent of
-------------------
the corporate capital and ownership structure of the members of the
Consolidated Group.

50
<PAGE>

(h) Fees and Expenses. Payment by the Credit Parties of all fees
-----------------
and expenses then due and payable to the Lenders and the Administrative
Agent, including, without limitation, payment to the Administrative Agent
of the fees set forth in the Administrative Agent's Fee Letter.

5.2 Conditions to all Extensions of Credit.
--------------------------------------

The obligation of each Lender to make any Extension of Credit hereunder
(including the initial Extension of Credit to be made hereunder) is subject to
the satisfaction of the following conditions precedent on the date of making
such Extension of Credit:

(a) Representations and Warranties. The representations and
------------------------------
warranties made by the Credit Parties herein and in the other Credit Documents
or which are contained in any certificate furnished at any time under or in
connection herewith shall be true and correct in all material respects on and as
of the date of such Extension of Credit as if made on and as of such date
(except for those which expressly relate to an earlier date).

(b) No Default or Event of Default. No Default or Event of Default
------------------------------
shall have occurred and be continuing on such date or after giving effect to the
Extension of Credit to be made on such date unless such Default or Event of
Default shall have been waived in accordance with this Credit Agreement.

(c) Additional Conditions to Revolving Loans. If a Revolving Loan
----------------------------------------
is requested pursuant to Sections 2.1 and 2.2, all conditions set forth in
Section 2 shall have been satisfied.

(d) Additional Conditions to Letters of Credit. If the issuance
------------------------------------------
of a Letter of Credit is requested pursuant to Sections 2.1 and 2.2, all
conditions set forth in Section 2 shall have been satisfied.

(e) Additional Conditions to Swingline Loans. If a Swingline Loan
----------------------------------------
is requested pursuant to Sections 2.1 and 2.2, all conditions set forth in
Section 2 shall have been satisfied.

Each request for an Extension of Credit (including Continuations and
Conversions) and each acceptance by the Borrower of an Extension of Credit
(including Continuations and Conversions) shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in paragraphs (a) and (b), and in (c), (d)
or (e) of this subsection have been satisfied.

51
<PAGE>

SECTION 6

REPRESENTATIONS AND WARRANTIES
------------------------------

To induce the Lenders to enter into this Credit Agreement and to make the
Extensions of Credit hereunder, each of the Credit Parties hereby represents and
warrants to the Administrative Agent and to each Lender that:

6.1 Financial Condition.
-------------------

Each of the financial statements described below (copies of which have
heretofore been provided to the Administrative Agent for distribution to the
Lenders) have been prepared in accordance with GAAP consistently applied
throughout the periods covered thereby, are complete and correct in all material
respects and present fairly the financial condition (including disclosure of all
material liabilities, contingent or otherwise) and results from operations of
the entities and for the periods specified, subject in the case of interim
company-prepared statements to normal year-end adjustments and the absence of
footnotes:

(i) the audited consolidated balance sheet of the Consolidated
Group for the fiscal year ending December 31, 1998, together with related
audited consolidated statements of income and cash flows for the fiscal
year then ending, as set forth in the Registration Statement;

(ii) the unaudited, company-prepared consolidated balance sheet of
the Consolidated Group for the fiscal quarter ending June 30, 1999,
together with related consolidated statements of income and cash flows for
the fiscal quarter then ending, as set forth in the Registration
Statement; and

(iii) after the Closing Date, the annual and quarterly financial
statements provided in accordance with Sections 7.1(a) and (b).

6.2 No Changes or Restricted Payments.
---------------------------------

Since the date of the most-recent annual audited financial statements
referenced in Section 6.1(i),

(i) for the period to the Closing Date, except as previously
disclosed in writing to the Administrative Agent and the Lenders, (A)
there have been no material sales, transfers or other dispositions of any
material part of the business or property of the members of the
Consolidated Group, nor have there been any material purchases or other
acquisitions of any business or property (including the Capital Stock of
any other person) by the members of the Consolidated Group, which are not
reflected in the annual audited or company-prepared quarterly financial
statements referenced in Section 6.1(i) and (ii) hereof, and (B) no
Restricted Payments have been declared or paid by members of the
Consolidated Group; and

52
<PAGE>

(ii) there have been no circumstances, developments or events
relating to or affecting the members of the Consolidated Group which,
individually or in the aggregate, has had or could reasonably be expected
to have a Material Adverse Effect.

6.3 Organization; Existence; Compliance with Law.
--------------------------------------------

Each of the members of the Consolidated Group (a) is duly organized,
validly existing in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary power
and authority, and the legal right to own and operate its Property, to lease the
Property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of Property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect, and (d) is in compliance with all
Requirements of Law, except to the extent that the failure to comply therewith
would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.

6.4 Power; Authorization; Enforceable Obligations.
---------------------------------------------

Each of the Credit Parties has the corporate or other necessary power and
authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party and has taken all necessary corporate or other
action to authorize the execution, delivery and performance by it of the Credit
Documents to which it is a party. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with acceptance of Extensions of Credit
or the making of the guaranties hereunder or with the execution, delivery or
performance of any Credit Documents by the Credit Parties (other than those
which have been obtained, such filings as are required by the Securities and
Exchange Commission and to fulfill other reporting requirements with
Governmental Authorities) or with the validity or enforceability of any Credit
Document against the Credit Parties (except such filings as are necessary in
connection with the perfection of the Liens, if any, created by such Credit
Documents). Each Credit Document to which it is a party constitutes a legal,
valid and binding obligation of such Credit Party enforceable against such
Credit Party in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).

6.5 No Legal Bar.
------------

The execution, delivery and performance of the Credit Documents, the
borrowings hereunder and the use of the Extensions of Credit will not violate
any Requirement of Law or any Contractual Obligation of any member of the
Consolidated Group (except those as to which waivers or consents have been
obtained and those that would not reasonably be expected to have a Material
Adverse Effect), and will not result in, or require, the creation or imposition
of any Lien on any of its respective properties or revenues pursuant to any
Requirement of Law or

53
<PAGE>

Contractual Obligation other than the Liens, if any, arising under or
contemplated in connection with the Credit Documents. No member of the
Consolidated Group is in default under or with respect to any of its Contractual
Obligations in any respect which would reasonably be expected to have a Material
Adverse Effect.

6.6 No Material Litigation and Disputes.
-----------------------------------

(a) No claim, litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the best knowledge of the
Credit Parties, threatened by or against, any members of the Consolidated Group
or against any of their respective properties or revenues which (a) relate to
the Credit Documents or any of the transactions contemplated hereby or thereby
or (b) if adversely determined, would reasonably be expected to have a Material
Adverse Effect. Set forth on Schedule 6.6 is a summary of all claims,
------------
litigation, investigations and proceedings pending or, to the best knowledge of
the Credit Parties, threatened by or against the members of the Consolidated
Group or against any of their respective properties or revenues, and none of
such actions, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect.

(b) No default exists and, to the best knowledge of the Credit Parties,
no default has been asserted, under any Contractual Obligations to which any
members of the Consolidated Group are party which individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.

6.7 No Defaults.
-----------

No Default or Event of Default has occurred and is continuing.

6.8 Ownership and Operation of Property.
-----------------------------------

Each of the members of the Consolidated Group (i) has good record and
marketable title to, or a valid leasehold interest in, all its material real
property, and good title to, or a valid leasehold interest in, all its other
material property, and none of such property is subject to any Lien, except for
Permitted Liens, and (ii) has obtained all material licenses, permits,
franchises or other certifications, consents, approvals and authorizations,
governmental or private, necessary to the ownership of its Property and to the
conduct of its business.

54
<PAGE>

6.9 Intellectual Property.
---------------------

Each of the members of the Consolidated Group owns, or has the legal right
to use, all United States trademarks, tradenames, copyrights, patents,
technology, know-how and processes, if any, necessary for each of them to
conduct its business as currently conducted (the "Intellectual Property") except
---------------------
for those the failure to own or have such legal right to use would not
reasonably be expected to have a Material Adverse Effect. No claim has been
asserted and is pending by any Person challenging or questioning the use of any
such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does any Credit Party know of any such claim, and the
use of such Intellectual Property by the members of the Consolidated Group does
not infringe on the rights of any Person, except for such claims and
infringements that, in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.

6.10 No Burdensome Restrictions.
--------------------------

No Requirement of Law or Contractual Obligation of the members of the
Consolidated Group would reasonably be expected to have a Material Adverse
Effect.

6.11 Taxes.
-----

Each of the members of the Consolidated Group has filed or caused to be
filed all federal income tax returns and all other material tax returns which
are required to be filed and has paid (i) all amounts shown therein to be due
(including interest and penalties) and (ii) all other taxes, fees, assessments
and other governmental charges (including mortgage recording taxes, documentary
stamp taxes and intangibles taxes) owing, except for such taxes which are not
yet delinquent or as are being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with GAAP have
been established unless the failure to make any such payment could give rise to
an immediate right to foreclose on a Lien securing such amounts. No tax claim
or assessment has been asserted against members of the Consolidated Group which
if adversely determined would reasonably be expected to have a Material Adverse
Effect.

6.12 ERISA
-----

Except as would not reasonably be expected to have a Material Adverse
Effect:

(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred, and, to
the best knowledge of the Credit Parties, no event or condition has occurred or
exists as a result of which any ERISA Event could reasonably be expected to
occur, with respect to any Plan; (ii) no "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the Internal
Revenue Code, whether or not waived, has occurred with respect to any Plan;
(iii) each Plan has been maintained, operated, and funded in compliance with its
own terms and in material compliance with the provisions of ERISA, the Internal
Revenue Code, and any other applicable federal or state laws; and (iv) no lien
in favor of the PBGC or a Plan has arisen or is reasonably likely to arise on
account of any Plan.

55
<PAGE>

(b) The actuarial present value of all "benefit liabilities" (as defined
in Section 4001(a)(16) of ERISA), whether or not vested, under each Single
Employer Plan, as of the last annual valuation date prior to the date on which
this representation is made or deemed made (determined, in each case, in
accordance with Financial Accounting Standards Board Statement 87, utilizing the
actuarial assumptions used in such Plan's most recent actuarial valuation
report), did not exceed as of such valuation date the fair market value of the
assets of such Plan.

(c) Neither the Borrower nor any ERISA Affiliate has incurred, or, to
the best knowledge of the Credit Parties, could reasonably be expected to incur,
any withdrawal liability under ERISA to any Multiemployer Plan or Multiple
Employer Plan. Neither the Borrower nor any ERISA Affiliate would become subject
to any withdrawal liability under ERISA if any member of the Consolidated Group
or any ERISA Affiliate were to withdraw completely from all Multiemployer Plans
and Multiple Employer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. Neither the Borrower
nor any ERISA Affiliate has received any notification that any Multiemployer
Plan is in reorganization (within the meaning of Section 4241 of ERISA), is
insolvent (within the meaning of Section 4245 of ERISA), or has been terminated
(within the meaning of Title IV of ERISA), and no Multiemployer Plan is, to the
best knowledge of the Credit Parties, reasonably expected to be in
reorganization, insolvent, or terminated.

(d) No member of the Consolidated Group nor any ERISA Affiliates has any
material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards Board
Statement 106. Each Plan which is a welfare plan (as defined in Section 3(1) of
ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Internal
Revenue Code apply has been administered in compliance in all material respects
of such sections.

(e) Neither the execution and delivery of this Credit Agreement nor the
consummation of the financing transactions contemplated thereunder will involve
any transaction which is subject to the prohibitions of Sections 404, 406 or 407
of ERISA or in connection with which a tax could be imposed pursuant to Section
4975 of the Internal Revenue Code. The representation by the Credit Parties in
the preceding sentence is made in reliance upon and subject to the accuracy of
the Lenders' representation in Section 11.15 with respect to their source of
funds and is subject, in the event that the source of the funds used by the
Lenders in connection with this transaction is an insurance company's general
asset account, to the application of Prohibited Transaction Class Exemption 95-
60, 60 Fed. Reg. 35,925 (1995), compliance with the regulations issued under
Section 401(c)(1)(A) of ERISA, or the issuance of any other prohibited
transaction exemption or similar relief, to the effect that assets in an
insurance company's general asset account do not constitute assets of an
"employee benefit plan" within the meaning of Section 3(3) of ERISA of a "plan"
within the meaning of Section 4975(e)(1) of the Internal Revenue Code.

6.13 Governmental Regulations, Etc.
-----------------------------

(a) None of the transactions contemplated by this Credit Agreement
(including, without limitation, the direct or indirect use of the proceeds of
the Loans) will violate or result in a violation of the Securities Act of 1933,
as amended, or the regulations issued pursuant thereto, or the

56
<PAGE>

Securities Exchange Act of 1934, as amended, or regulations issued pursuant
thereto, or Regulation T, U or X. "Margin stock" within the meanings of
Regulation U does not constitute more than 25% of the value of the consolidated
assets of the Borrower and its Subsidiaries.

(b) None of the members of the Consolidated Group is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or the Investment Company Act of 1940, each as amended. In addition,
none of the members of the Consolidated Group is (i) an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, and is not controlled by such a company, or (ii) a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.

(c) No director, executive officer or principal shareholder of any
member of the Consolidated Group is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with reference to any
Lender) have the respective meanings assigned thereto in Regulation O.

6.14 Subsidiaries.
------------

Set forth on Schedule 6.14 are all the Subsidiaries of the Borrower,
-------------
including the jurisdiction of organization, ownership and ownership percentages
thereof. The outstanding shares of Capital Stock shown have been validly issued,
fully paid and are non-assessable and owned free of Liens other than Permitted
Liens. The outstanding shares of Capital Stock shown are not the subject of buy-
sell, voting trust or other shareholder agreement except as identified on
Schedule 6.14.
- -------------

6.15 Purpose of Extensions of Credit.
-------------------------------

The Loans will be used by the Borrower solely to (i) refinance certain
existing Indebtedness of the Borrower and (ii) finance working capital and other
general corporate purposes of the Borrower and its Subsidiaries (including, but
not limited to, Capital Expenditures, the repurchase of Capital Stock of the
Borrower and Permitted Acquisitions).

6.16 Environmental Matters.
---------------------

Except as would not reasonably be expected to have a Material Adverse
Effect:

(a) Each of the facilities and properties owned, leased or operated by
the members of the Consolidated Group (the "Subject Properties") and all
------------------
operations at the Subject Properties are in compliance with all applicable
Environmental Laws, and there is no violation of any Environmental Law with
respect to the Subject Properties or the businesses operated by the members of
the Consolidated Group (the "Businesses"), and, to the knowledge of the
----------
Borrower, there are no conditions relating to the Businesses or Subject
Properties that could give rise to liability under any applicable Environmental
Laws.

57
<PAGE>

(b) None of the Subject Properties contains, or, to the knowledge of the
Borrower, has previously contained, any Materials of Environmental Concern at,
on or under the Subject Properties in amounts or concentrations that constitute
or constituted a violation of, or could give rise to liability under,
Environmental Laws.

(c) None of the members of the Consolidated Group has received any
written notice of, or inquiry from any Governmental Authority regarding, any
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Subject Properties or the Businesses, nor does any member
of the Consolidated Group have knowledge or reason to believe that any such
notice will be received or is being threatened.

(d) Materials of Environmental Concern have not been transported or
disposed of from the Subject Properties, or generated, treated, stored or
disposed of at, on or under any of the Subject Properties or any other location,
in each case by or on behalf any members of the Consolidated Group in violation
of, or in a manner that would be reasonably likely to give rise to liability
under, any applicable Environmental Law.

(e) No judicial proceeding or governmental or administrative action is
pending or, to the best knowledge of any Credit Party, threatened, under any
Environmental Law to which any member of the Consolidated Group is or will be
named as a party, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect to
any member of the Consolidated Group, the Subject Properties or the Businesses.

(f) There has been no release or, threat of release of Materials of
Environmental Concern at or from the Subject Properties, or arising from or
related to the operations (including, without limitation, disposal) of any
member of the Consolidated Group in connection with the Subject Properties or
otherwise in connection with the Businesses, in violation of or in amounts or in
a manner that could give rise to liability under Environmental Laws.

6.17 Year 2000 Compliance.
--------------------

The Borrower has (i) initiated a review and assessment of all areas within
its and each of its Subsidiaries' business and operations (including those
affected by suppliers, vendors and customers) that could be adversely affected
by the "Year 2000 Problem" (that is, the risk that computer applications used by
-----------------
the Borrower or any of its Subsidiaries (or suppliers, vendors and customers)
may be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999), (ii)
developed a plan and timeline for addressing the Year 2000 Problem on a timely
basis, and (iii) to date, implemented that plan in accordance with that
timetable. Based on the foregoing, the Borrower believes that all computer
applications (including those of its suppliers, vendors and customers) that are
material to its or any of its Subsidiaries' business and operations are
reasonably expected on a timely basis to be able to perform properly date-
sensitive functions for all dates before and after January 1, 2000 (that is, be
"Year 2000 Compliant"), except to the extent that a failure to do so could not
-------------------
reasonably be expected to have a Material Adverse Effect.

58
<PAGE>

6.18 No Material Misstatements.
-------------------------

None of the information, reports, financial statements, exhibits or
schedules, taken as a whole, furnished by or on behalf of any member of the
Consolidated Group to the Administrative Agent or any Lender in connection with
the negotiation of the Credit Documents or included therein or delivered
pursuant thereto contained any material misstatement of fact or omitted to state
any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not materially misleading, provided
--------
that to the extent any such information, report, financial statement, exhibit or
schedule was based upon or constitutes a forecast or projection, each of the
Credit Parties represents only that it acted in good faith and utilized
reasonable assumptions and due care in the preparation of such information,
report, financial statement, exhibit or schedule.

6.19 Labor Matters.
-------------

Except as set forth in Schedule 6.19 and as would not reasonably be
-------------
expected to have a Material Adverse Effect,

(i) There are no strikes or lockouts against any members of the
Consolidated Group pending or, to the best knowledge of the Credit
Parties, threatened;

(ii) the hours worked by and payments made to employees of the
Consolidated Group have not been in violation of the Fair Labor Standards
Act or any other applicable federal, state, local or foreign law dealing
with such matters;

(iii) all payments due from members of the Consolidated Group, or
for which any claim may be made against a member of the Consolidated
Group, on account of wages and employee health and welfare insurance and
other benefits, have been paid or accrued as a liability on the books of
the respective members of the Consolidated Group; and

(iv) none of the members of the Consolidated Group is party to a
collective bargaining agreement.

6.20 Solvency.
--------

Immediately after giving effect to the initial Extensions of Credit made
on the Closing Date, (i) the fair value of the assets of each Credit Party will
exceed its debts and liabilities, subordinated, contingent or otherwise; (ii)
the present fair saleable value of the property of each Credit Party will be
greater than the amount that will be required to pay the probable liability of
its debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and mature; and (iii) each Credit
Party will not have unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Closing Date.

59
<PAGE>

6.21 No Other Broker's Fees.
----------------------

None of the members of the Consolidated Group owes to any Person other
than the Lenders and their affiliates, or otherwise has any obligation in
respect of any finder's, broker's, investment banker's or other similar fee in
connection with the transactions contemplated in the Credit Agreement and the
other Credit Documents.

SECTION 7

AFFIRMATIVE COVENANTS
---------------------

Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding or any Letter of Credit is outstanding,
and until all of the Commitments hereunder shall have terminated:

7.1 Information Covenants.
---------------------

The Credit Parties will furnish, or cause to be furnished, to the
Administrative Agent and each of the Lenders:

(a) Annual Financial Statements. As soon as available, and in any
---------------------------
event within 90 days after the close of each fiscal year of the members of
the Consolidated Group, a consolidated balance sheet and income statement
of the members of the Consolidated Group as of the end of such fiscal
year, together with related consolidated statements changes is
shareholders' equity and of cash flows for such fiscal year, in each case
setting forth in comparative form consolidated figures for the preceding
fiscal year, all such financial information described above to be in
reasonable form and detail and audited by independent certified public
accountants of recognized national standing reasonably acceptable to the
Administrative Agent and whose opinion shall be to the effect that such
financial statements have been prepared in accordance with GAAP (except
for changes with which such accountants concur) and shall not be limited
as to the scope of the audit or qualified as to the status of any member
of the Consolidated Group as a going concern or any other material
qualifications or exceptions.

(b) Quarterly Financial Statements. As soon as available, and in
------------------------------
any event within 45 days after the close of each fiscal quarter of the
members of the Consolidated Group (other than the fourth fiscal quarter,
in which case 90 days after the end thereof) a consolidated balance sheet
and income statement of the members of the Consolidated Group as of the
end of such fiscal quarter, together with related consolidated statements
of changes in shareholders' equity and of cash flows for such fiscal
quarter, in each case setting forth in comparative form consolidated
figures for the corresponding period of the preceding fiscal year, all
such financial information described above to be in reasonable form and
detail and reasonably acceptable to the Administrative Agent, and
accompanied by a certificate of an Executive Officer of the Borrower to
the effect that such quarterly

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<PAGE>

financial statements fairly present in all material respects the financial
condition of the members of the Consolidated Group and have been prepared
in accordance with GAAP, subject to changes resulting from audit and
normal year-end audit adjustments.

(c) Officer's Certificate. At the time of delivery of the
---------------------
financial statements provided for in Sections 7.1(a) and 7.1(b) above, a
certificate of an Executive Officer of the Borrower substantially in the
form of Schedule 7.1(c), (i) demonstrating compliance with the financial
---------------
covenants contained in Section 7.11 by calculation thereof as of the end
of each such fiscal period and (ii) stating that no Default or Event of
Default exists, or if any Default or Event of Default does exist,
specifying the nature and extent thereof and what action the Credit
Parties propose to take with respect thereto.

(d) Annual Business Plan and Budgets. Prior to the end of each
--------------------------------
fiscal year of the Borrower, beginning with the fiscal year ending
December 31, 1999, an annual business plan and budget of the members of
the Consolidated Group containing, among other things, pro forma financial
statements for the next fiscal year.

(e) Accountant's Certificate. Within the period for delivery of
------------------------
the annual financial statements provided in Section 7.1(a), a certificate
of the accountants conducting the annual audit stating that they have
reviewed this Credit Agreement and stating further whether, in the course
of their audit, they have become aware of any Default or Event of Default
arising from the Borrower's failure to comply with the financial covenants
contained in Section 7.11 and, if any such Default or Event of Default
exists, specifying the nature and extent thereof.

(f) Auditor's Reports. Promptly upon receipt thereof, a copy of
-----------------
any other report or "management letter" submitted by independent
accountants to any member of the Consolidated Group in connection with any
annual, interim or special audit of the books of such Person.

(g) Reports. Promptly upon transmission or receipt thereof, (i)
-------
copies of any filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any successor agency, and copies of
all financial statements, proxy statements, notices and reports as any
member of the Consolidated Group shall send to its shareholders or to a
holder of any Indebtedness owed by any member of the Consolidated Group in
its capacity as such a holder and (ii) upon the request of the
Administrative Agent, all reports and written information to and from the
United States Environmental Protection Agency, or any state or local
agency responsible for environmental matters, the United States
Occupational Health and Safety Administration, or any state or local
agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety
matters.

(h) Notices. Upon any Executive Officer of a Credit Party
-------
obtaining knowledge thereof, the Credit Parties will give written notice
to the Administrative Agent immediately of (i) the occurrence of an event
or condition consisting of a Default or Event of Default, specifying the
nature and existence thereof and what action the Credit Parties propose to

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<PAGE>

take with respect thereto, and (ii) the occurrence of any of the following
with respect to any member of the Consolidated Group (A) the pendency or
commencement of any litigation, arbitral or governmental proceeding
against such Person which is reasonably is likely to have a Material
Adverse Effect or (B) the institution of any proceedings against such
Person with respect to, or the receipt of notice by such Person of
potential liability or responsibility for violation, or alleged violation
of any federal, state or local law, rule or regulation, including but not
limited to, Environmental Laws, the violation of which could reasonably be
expected to have a Material Adverse Effect.

(i) ERISA. Upon any Executive Officer of a Credit Party obtaining
-----
knowledge thereof, the Credit Parties will give written notice to the
Administrative Agent promptly (and in any event within ten Business Days)
of: (i) any event or condition, including, but not limited to, any
Reportable Event, that constitutes, or might reasonably lead to, an ERISA
Event; (ii) with respect to any Multiemployer Plan, the receipt of notice
as prescribed in ERISA or otherwise of any withdrawal liability assessed
against the Credit Parties or any ERISA Affiliates, or of a determination
that any Multiemployer Plan is in reorganization or insolvent (both within
the meaning of Title IV of ERISA) which could result in a liability of at
least $5,000,000; (iii) the failure to make full payment on or before the
due date (including extensions) thereof of all amounts which any member of
the Consolidated Group or any ERISA Affiliate is required to contribute to
each Plan pursuant to its terms and as required to meet the minimum
funding standard set forth in ERISA and the Internal Revenue Code with
respect thereto which could result in a liability of at least $5,000,000;
or (iv) any change in the funding status of any Plan that could have a
Material Adverse Effect, together with a description of any such event or
condition or a copy of any such notice and a statement by an Executive
Officer of the Borrower briefly setting forth the details regarding such
event, condition, or notice, and the action, if any, which has been or is
being taken or is proposed to be taken by the Credit Parties with respect
thereto. Promptly upon request, the Credit Parties shall furnish the
Administrative Agent and the Lenders with such additional information
concerning any Plan as may be reasonably requested, including, but not
limited to, copies of each annual report/return (Form 5500 series), as
well as all schedules and attachments thereto required to be filed with
the Department of Labor and/or the Internal Revenue Service pursuant to
ERISA and the Internal Revenue Code, respectively, for each "plan year"
(within the meaning of Section 3(39) of ERISA).

(j) Environmental.
-------------

(i) Upon the reasonable written request of the
Administrative Agent following the occurrence of any event or the
discovery of any condition which the Administrative Agent or the
Required Lenders reasonably believe has caused (or could reasonably
be expected to cause) the representations and warranties set forth
in Section 6.16 to be untrue in any material respect, the Credit
Parties will furnish or cause to be furnished to the Administrative
Agent, at the Credit Parties' expense, a report of an environmental
assessment of reasonable scope, form and depth, (including, where
appropriate, invasive soil or groundwater sampling) by a consultant
reasonably acceptable to the Administrative Agent as to the nature
and

62
<PAGE>

extent of the presence of any Materials of Environmental Concern on
any Subject Properties (as defined in Section 6.16) and as to the
compliance by any member of the Consolidated Group with
Environmental Laws at such Subject Properties. If the Credit Parties
fail to deliver such an environmental report within seventy-five
(75) days after receipt of such written request then the
Administrative Agent may arrange for same, and the members of the
Consolidated Group hereby grant to the Administrative Agent and
their representatives access to the Subject Properties to reasonably
undertake such an assessment (including, where appropriate, invasive
soil or groundwater sampling). The reasonable cost of any assessment
arranged for by the Administrative Agent pursuant to this provision
will be payable by the Credit Parties on demand.

(ii) The members of the Consolidated Group will conduct and
complete all investigations, studies, sampling, and testing and all
remedial, removal, and other actions necessary to address all
Materials of Environmental Concern on, from or affecting any of the
Subject Properties to the extent necessary to be in compliance with
all Environmental Laws and with the validly issued orders and
directives of all Governmental Authorities with jurisdiction over
such Subject Properties to the extent any failure could have a
Material Adverse Effect.

(k) Other Information. With reasonable promptness upon any such
-----------------
request, such other information regarding the business, properties or
financial condition of any member of the Consolidated Group as the
Administrative Agent or the Required Lenders may reasonably request.

7.2 Preservation of Existence and Franchises.
----------------------------------------

Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5, each
Credit Party will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority except where failure to do so could not reasonably be
expected to have a Material Adverse Effect.

7.3 Books and Records.
-----------------

Each Credit Party will, and will cause each of its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).

7.4 Compliance with Law.
-------------------

Each Credit Party will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its Property if
noncompliance with any such law, rule, regulation, order or restriction could
have a Material Adverse Effect.

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<PAGE>

7.5 Payment of Taxes and Other Indebtedness.
---------------------------------------

Each Credit Party will, and will cause each of its Subsidiaries to, pay
and discharge (a) all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent, (b) all lawful claims (including claims for
labor, materials and supplies) which, if unpaid, might give rise to a Lien upon
any of its properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that no member of the
-------- -------
Consolidated Group shall be required to pay any such tax, assessment, charge,
levy, claim or Indebtedness which is being contested in good faith by
appropriate proceedings for which adequate reserves determined in accordance
with GAAP have been established, unless the failure to make any such payment
could have a Material Adverse Effect.

7.6 Insurance.
---------

Each Credit Party will maintain with financially sound and reputable
insurance companies casualty, liability and such other insurance with such
coverage and deductibles, and in such amounts as may be consistent with prudent
business practice and in any event consistent with normal industry practice; and
furnish to the Administrative Agent, upon written request, full information as
to the insurance carried.

7.7 Maintenance of Property.
-----------------------

Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

7.8 Performance of Obligations.
--------------------------

Each Credit Party will, and will cause each of its Subsidiaries to,
perform all of its obligations under the terms of all agreements, indentures,
mortgages, security agreements and other debt instruments to which it is a party
or by which it is bound except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect.

7.9 Use of Proceeds.
---------------

The Borrower will use the proceeds of Extensions of Credit solely for the
purposes set forth in Section 6.15.

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<PAGE>

7.10 Audits/Inspections.
------------------

Upon reasonable notice and during normal business hours, each Credit Party
will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Administrative Agent, including, without limitation,
independent accountants, agents, attorneys, and appraisers to visit and inspect
its property, including its books and records, its accounts receivable and
inventory, its facilities and its other business assets, and to make photocopies
or photographs thereof and to write down and record any information such
representative obtains and shall permit the Administrative Agent or its
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers, employees and
representatives of such Person.

7.11 Financial Covenants.
-------------------

(a) Consolidated Total Leverage Ratio. As of the end of each fiscal
---------------------------------
quarter, the Consolidated Total Leverage Ratio shall be not greater than
2.5:1.0.

(b) Consolidated Interest Coverage Ratio. As of the end of each fiscal
------------------------------------
quarter, the Consolidated Interest Coverage Ratio shall be not less than
3.5:1.0.

(c) Consolidated Net Worth. As of the end of each fiscal quarter, the
----------------------
Consolidated Net Worth shall be not less than the sum of (i) $225 million plus
----
(ii) as of the end of such fiscal quarter and each preceding fiscal quarter to
occur after the Closing Date, an amount equal to fifty percent (50%) of
Consolidated Net Income (but not less than zero) for such fiscal quarter, such
increases to be cumulative, plus (iii) an amount equal to one hundred percent
----
(100%) of net proceeds from Equity Transactions occurring after the Closing
Date.

(d) Consolidated EBITDA. As of the end of each fiscal quarter beginning
-------------------
with the fiscal quarter ending December 31, 1999, the Consolidated EBITDA for
the period of four consecutive fiscal quarters ending as of such day shall not
be less than $80,000,000.

7.12 Additional Guarantors.
---------------------

At any time that a Wholly Owned Subsidiary which is not a Guarantor (each
a "Non-Guarantor Subsidiary") shall either:
------------------------

(i) individually, constitute more than five percent (5%) of the
consolidated assets of the Consolidated Group as of the end of the
immediately preceding fiscal quarter or generate more than five percent
(5%) of the consolidated revenues of the Consolidated Group for the period
of four consecutive fiscal quarters ending as of the end of the
immediately preceding fiscal quarter, or

(ii) collectively with all Non-Guarantor Subsidiaries, constitute
more than ten percent (10%) of the consolidated assets of the Consolidated
Group as of the end of the immediately preceding fiscal quarter or
generate more than ten percent (10%) of the

65
<PAGE>

consolidated revenues of the Consolidated Group for the period of four
consecutive fiscal quarters ending as of the end of the immediately
preceding fiscal quarter,

then the Borrower shall (a) provide the Administrative Agent with written notice
thereof setting forth information in reasonable detail describing all of the
assets of such Non-Guarantor Subsidiary and (b) if such Person is a Domestic
Subsidiary, (i) cause such Non-Guarantor Subsidiary to execute a Joinder
Agreement in substantially the same form as Schedule 7.12 and (ii) cause such
-------------
Non-Guarantor Subsidiary to deliver such supporting resolutions, incumbency
certificates, corporate formation and organizational documentation and opinions
of counsel as the Administrative Agent may reasonably request.

7.13 Year 2000 Compliance.
--------------------

The Credit Parties will promptly notify the Administrative Agent in the
event any Credit Party discovers or determines that any computer application
(including those of its suppliers, vendors and customers) that is material to
its or any of its Subsidiaries' business and operations will not be Year 2000
Compliant, except to the extent that such failure could not reasonably be
expected to have a Material Adverse Effect.

SECTION 8

NEGATIVE COVENANTS
------------------

8.1 Indebtedness.
------------

The Credit Parties will not permit any member of the Consolidated Group to
contract, create, incur, assume or permit to exist any Indebtedness, except:

(a) Indebtedness existing or arising under this Credit Agreement
or the other Credit Documents;

(b) Indebtedness of the Borrower and its Subsidiaries set forth
on Schedule 8.1, and renewals, refinancings and extensions thereof on
------------
terms and conditions not materially less favorable to such Person than
such existing Indebtedness;

(c) Indebtedness (including obligations in respect of Capital
Leases or Synthetic Leases) hereafter incurred by the Borrower or any of
its Subsidiaries to finance the purchase of fixed assets provided that (i)
--------
the total of all such Indebtedness for the Borrower and its Subsidiaries
taken together shall not exceed an aggregate principal amount of
$5,000,000 at any one time outstanding; (ii) such Indebtedness when
incurred shall not exceed the

66
<PAGE>

purchase price of the asset(s) financed; and (iii) no such Indebtedness
shall be refinanced for a principal amount in excess of the principal
balance outstanding thereon at the time of such refinancing;

(d) obligations of the Borrower or any of its Subsidiaries owing
under interest rate, commodities and foreign currency exchange protection
agreements entered into in the ordinary course of business to manage
existing or anticipated risks and not for speculative purposes;

(e) unsecured intercompany Indebtedness owing by a member of the
Consolidated Group to another member of the Consolidated Group (subject,
however, to the limitations of Section 8.6 in the case of the member of
the Consolidated Group extending the loan, advance or credit);

(f) obligations to make contingent payments (including, without
limitation, earn-out payments) incurred in connection with Permitted
Acquisitions and Acquisitions consummated prior to the Closing Date
provided that (i) the maximum amount of cash payments made in respect of
such obligations shall not exceed $5 million in the aggregate and (ii)
such obligations shall be expressly subordinated in right of payment to
the prior payment of the loans and obligations under the Credit Agreement
and the other Credit Documents on the terms and conditions and evidenced
by documentation satisfactory to the Administrative Agent;

(g) Support Obligations of any member of the Consolidated Group
with respect to any Indebtedness of any member of the Consolidated Group
permitted under this Section 8.1; and

(h) other secured Funded Debt of the Borrower and its Subsidiaries
in an aggregate outstanding principal amount of up to $5,000,000 at any
time assumed in connection with Permitted Acquisitions; and

(i) other unsecured Funded Debt of the Borrower and its
Subsidiaries in an aggregate outstanding principal amount of up to
$15,000,000 at any time.

8.2 Liens.
-----

The Credit Parties will not permit any member of the Consolidated Group to
contract, create, incur, assume or permit to exist any Lien with respect to any
of its Property, whether now owned or after acquired, except for Permitted
Liens.

8.3 Nature of Business.
------------------

The Credit Parties will not permit any member of the Consolidated Group to
substantively alter the character or conduct of the business conducted by such
Person as of the Closing Date.

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<PAGE>

8.4 Merger and Consolidation, Dissolution and Acquisitions.
------------------------------------------------------

(a) No member of the Consolidated Group will enter into any transaction
of merger or consolidation, except that

(i) a Domestic Credit Party may be party to a transaction of
merger or consolidation with another Domestic Credit Party, provided that
--------
if the Borrower is a party to such transaction, it shall be the surviving
entity;

(ii) a Foreign Subsidiary may be party to a transaction of merger
or consolidation with a Subsidiary of the Borrower, provided that (A) if a
--------
Domestic Subsidiary is a party thereto, such Domestic Subsidiary shall be
the surviving entity and if such Domestic Subsidiary is not already a
Credit Party, shall take such actions as may be necessary for compliance
with the provisions of Section 7.12, and (B) if a Foreign Subsidiary is
the other party thereto, the surviving entity shall be a Foreign
Subsidiary;

(iii) a Domestic Subsidiary of the Borrower may be a party to a
transaction of merger or consolidation with a Person other than a member
of the Consolidated Group, provided that (A) the surviving entity shall be
--------
a Domestic Subsidiary of the Borrower and shall take such actions as may
be necessary for compliance with the provisions of Section 7.12, (B) no
Default or Event of Default shall exist immediately after giving effect
thereto, and (C) the transaction shall otherwise constitute a Permitted
Acquisition;

(iv) a Subsidiary of the Borrower may enter into a transaction of
merger or consolidation in connection with an Asset Disposition permitted
under Section 8.5.

(b) No member of the Consolidated Group shall make any Acquisition,
unless:

(i) in the case of an acquisition of Capital Stock of another
Person, after giving effect to such acquisition,

(A) if the acquisition is not of a controlling interest in
the subject Person such that after giving effect thereto the subject
Person will not be a Subsidiary, then the acquisition constitutes a
Permitted Investment; and

(B) if the acquisition is of a controlling interest in the
subject Person such that after giving effect thereto the subject
Person will be a Subsidiary, then the Acquisition constitutes a
Permitted Acquisition;

(ii) in the case of an acquisition of all or any substantial
portion of the Property (other than Capital Stock) of another Person, then
such Acquisition constitutes a Permitted Acquisition.

8.5 Asset Dispositions.
------------------

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<PAGE>

Other than the Healthcare Spin-Off and the Internet Spin-Off, the Credit
Parties will not permit any member of the Consolidated Group to make any Asset
Disposition (including, without limitation, any Sale and Leaseback Transaction),
unless

(i) the sale, lease or other disposition is to a Domestic Credit
Party; or

(ii) in all other cases, (A) at least seventy-five percent (75%)
of the consideration paid therefor shall consist of cash, Cash Equivalents
or seller financing notes (to the extent permitted by Section 8.6), (B) if
the subject transaction is a Sale and Leaseback Transaction, such
transaction shall be permitted by Section 8.11, (C) the aggregate net book
value of all assets sold, leased or otherwise disposed of shall not exceed
$30 million in any fiscal year, (D) no Default or Event of Default shall
exist immediately after giving effect thereto, and (E) the Borrower shall
have demonstrated compliance with the financial covenants hereunder on a
Pro Forma Basis after giving effect to the disposition and shall have
delivered to the Administrative Agent a Pro Forma Compliance Certificate
(including reaffirmation of the representations and warranties hereunder
as of such date before and after giving effect to such transaction) in
connection therewith.

8.6 Investments.
-----------

The Credit Parties will not permit any member of the Consolidated Group to
make or permit to exist Investments in or to any Person, except for Permitted
Investments.

8.7 Restricted Payments.
-------------------

Except for the Healthcare Spin-Off and the Internet Spin-Off, the Credit
Parties will not make, or permit any member of the Consolidated Group to make,
any Restricted Payment, unless (a) (i) no Default or Event of Default shall
exist immediately after giving effect thereto and (ii) the Borrower shall have
demonstrated compliance with the financial covenants hereunder on a Pro Forma
Basis after giving effect to the Restricted Payment and shall have delivered to
the Administrative Agent a Pro Forma Compliance Certificate (including
reaffirmation of the representations and warranties hereunder as of such date
before and after giving effect to such transaction) in connection therewith, and
(b) with respect to any payment described in clauses (ii) and (iii) of the
definition of Restricted Payment, (A) the amount of all such payments shall not
exceed $150,000,000 in the aggregate and (B) no such payment shall be made to
acquire any shares of Capital Stock (or warrants, options or other rights to
acquire Capital Stock) of Daniel M. Snyder, Michele D. Snyder and their
Affiliates.

8.8 Modifications and Payments in respect of Other Funded Debt.
----------------------------------------------------------

None of the members of the Consolidated Group will

(a) After the issuance thereof, amend or modify (or permit the amendment
or modification of) the terms of any Indebtedness in a manner materially adverse
to the interests of the Lenders (including specifically shortening any maturity
or average life to maturity or

69
<PAGE>

requiring any payment sooner than previously scheduled or increasing the
interest rate or fees applicable thereto);

(b) Amend or modify, or permit or acquiesce to the amendment or
modification (including waivers) of, any material provisions of any Subordinated
Debt, including any notes or instruments evidencing any Subordinated Debt and
any indenture or other governing instrument relating thereto, in a manner
materially adverse to the interests of the Lenders;

(d) Except in connection with a refinancing or refunding permitted
hereunder, make any prepayment, redemption, defeasance or acquisition for value
of (including without limitation, by way of depositing money or securities with
the trustee with respect thereto before due for the purpose of paying when due),
or refund, refinance or exchange of any Funded Debt (other than the Indebtedness
under the Credit Documents and intercompany Indebtedness permitted hereunder)
other than regularly scheduled payments of principal and interest on such Funded
Debt.

8.9 Transactions with Affiliates.
----------------------------

The Credit Parties will not permit any member of the Consolidated Group to
enter into or permit to exist any transaction or series of transactions with any
officer, director, shareholder, Subsidiary or Affiliate of such Person other
than (a) transactions among the Credit Parties, (b) normal compensation and
reimbursement of expenses of officers and directors and (c) except as otherwise
specifically limited in this Credit Agreement, other transactions which are
entered into in the ordinary course of such Person's business on terms and
conditions substantially as favorable to such Person as would be obtainable by
it in a comparable arms-length transaction with a Person other than an officer,
director, shareholder, Subsidiary or Affiliate.

8.10 Fiscal Year; Organizational Documents.
-------------------------------------

The Credit Parties will not permit any member of the Consolidated Group to
change its fiscal year or amend, modify or change its articles of incorporation
(or corporate charter or other similar organizational document) or bylaws (or
other similar document) without the prior written consent of the Required
Lenders.

8.11 Sale Leasebacks.
---------------

The Credit Parties will not permit any member of the Consolidated Group to
enter into any Sale and Leaseback Transaction unless such Sale and Leaseback
Transaction constitutes purchase money Indebtedness permitted by Section 8.1(c).

70
<PAGE>

SECTION 9

EVENTS OF DEFAULT
-----------------

9.1 Events of Default.
-----------------

An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
----------------

(a) Payment. Any Credit Party shall
-------

(i) default in the payment when due of any principal of any
of the Loans or of any reimbursement obligations arising from
drawings under Letters of Credit, or

(ii) default, and such default shall continue for three (3)
or more Business Days, in the payment when due of any interest on the
Loans or on any reimbursement obligations arising from drawings under
Letters of Credit, or of any Fees or other amounts owing hereunder,
under any of the other Credit Documents or in connection herewith or
therewith; or

(b) Representations. Any representation, warranty or statement made
---------------
or deemed to be made by any Credit Party herein, in any of the other
Credit Documents, or in any statement or certificate delivered or required
to be delivered pursuant hereto or thereto shall prove untrue in any
material respect on the date as of which it was made or deemed to have
been made; or

(i) default in the due performance or observance of any
term, covenant or agreement contained in Sections 7.2, 7.9, 7.11,
7.12, 7.13 or 8.1 through 8.11, inclusive;

(ii) default in the due performance or observance of any
term, covenant or agreement contained in Sections 7.1(a), (b) (c) or
(d) and such default shall continue unremedied for a period of at
least 5 days after the earlier of an Executive Officer of a Credit
Party becoming aware of such default or notice thereof by the
Administrative Agent; or

(iii) default in the due performance or observance by it of
any term, covenant or agreement (other than those referred to in
subsections (a), (b), (c)(i) or (c)(ii) of this Section 9.1)
contained in this Credit Agreement or any other Credit Document and
such default shall continue unremedied for a period of at least 30
days after the earlier of an Executive Officer of a Credit Party
becoming aware of such default or notice thereof by the
Administrative Agent; or

71
<PAGE>

(d) Other Credit Documents. Except as a result of or in connection
----------------------
with a dissolution, merger or disposition of a Subsidiary permitted under
Section 8.4 or Section 8.5, any Credit Document shall fail to be in full
force and effect or to give the Administrative Agent and/or the Lenders
the Liens, rights, powers and privileges purported to be created thereby,
or any Credit Party shall so state in writing; or

(e) Guaranties. Except as the result of or in connection with a
----------
dissolution, merger or disposition of a Subsidiary permitted under Section
8.4 or Section 8.5, the guaranty given by any Guarantor (including any
Person which becomes a Guarantor after the Closing Date in accordance with
Section 7.12) or any provision thereof shall cease to be in full force and
effect, or any Guarantor (including any Person which becomes a Guarantor
after the Closing Date in accordance with Section 7.12) or any Person
acting by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under such guaranty, or any Guarantor shall
default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any
guaranty; or

(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect
---------------
to any member of the Consolidated Group; or

(g) Defaults under Other Agreements. With respect to any
-------------------------------
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) in excess of $5,000,000 in the aggregate for the members of the
Consolidated Group taken as a whole, (i) any member of the Consolidated
Group shall (A) default in any payment (beyond the applicable grace period
with respect thereto, if any) with respect to any such Indebtedness, or
(B) the occurrence and continuance of a default in the observance or
performance relating to such Indebtedness or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event
or condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or to permit, the holder or
holders of such Indebtedness (or trustee or agent on behalf of such
holders) to cause (determined without regard to whether any notice or
lapse of time is required), any such Indebtedness to become due prior to
its stated maturity; or (ii) any such Indebtedness shall be declared due
and payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof; or

(h) Judgments. One or more judgments or decrees shall be entered
---------
against one or more of the members of the Consolidated Group involving a
liability of $5,000,000 or more in the aggregate (to the extent not paid
or fully covered by insurance provided by a carrier who has acknowledged
coverage and has the ability to perform) and any such judgments or decrees
shall not have been vacated, discharged or stayed or bonded pending appeal
within 30 days from the entry thereof; or

(i) ERISA. Any of the following events or conditions, if such event
-----
or condition is reasonably likely to result in the imposition of taxes,
penalties, or other liabilities in an aggregate amount in excess of
$5,000,000: (i) any "accumulated funding deficiency," as such term is
defined in Section 302 of ERISA and Section 412 of the Internal Revenue
Code, whether or not waived, shall exist with respect to any Plan, or any

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lien shall arise on the assets of the Borrower or any ERISA Affiliate in
favor of the PBGC or a Plan; (ii) an ERISA Event shall occur with respect
to a Single Employer Plan, which results in the termination of such Plan
for purposes of Title IV of ERISA; (iii) an ERISA Event shall occur with
respect to a Multiemployer Plan or Multiple Employer Plan, which results
in (A) the termination of such Plan for purposes of Title IV of ERISA, or
(B) the Borrower or any ERISA Affiliate incurring any liability in
connection with a withdrawal from, reorganization of (within the meaning
of Section 4241 of ERISA), or insolvency (within the meaning of Section
4245 of ERISA) of such Plan; or (iv) any prohibited transaction (within
the meaning of Section 406 of ERISA or Section 4975 of the Internal
Revenue Code) or breach of fiduciary responsibility shall occur which
subjects the Borrower or any ERISA Affiliate to any liability under
Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the
Internal Revenue Code, or under any agreement or other instrument pursuant
to which the Borrower or any ERISA Affiliate has agreed or is required to
indemnify any person against any such liability; or

(j) Ownership. There shall occur a Change of Control.
---------

9.2 Acceleration; Remedies.
----------------------

Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting procedures in
Section 11.6), the Administrative Agent may or, upon the direction of the
Required Lenders, shall by written notice to the Credit Parties take any of the
following actions:

(a) Termination of Commitments. Declare the Commitments terminated
--------------------------
whereupon the Commitments shall be immediately terminated.

(b) Acceleration. Declare the unpaid principal of and any accrued
------------
interest in respect of all Loans, any reimbursement obligations arising
from drawings under Letters of Credit and any and all other indebtedness
or obligations of any and every kind owing by the Credit Parties to the
Administrative Agent and/or any of the Lenders hereunder to be due
whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Credit Parties.

(c) Cash Collateral. Direct the Credit Parties to pay (and the
---------------
Credit Parties agree that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), they will
immediately pay) to the Administrative Agent additional cash, to be held
by the Administrative Agent, for the benefit of the Lenders, in a cash
collateral account as additional security for the LOC Obligations in
respect of subsequent drawings under all then outstanding Letters of
Credit in an amount equal to the maximum aggregate amount which may be
drawn under all Letters of Credits then outstanding.

(d) Enforcement of Rights. Enforce any and all rights and interests
---------------------
created and existing under the Credit Documents including, without
limitation, all rights and remedies against a Guarantor and all rights of
set-off.

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<PAGE>

Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur with respect to the Borrower, then the Commitments
shall automatically terminate and all Loans, all reimbursement obligations
arising from drawings under Letters of Credit, all accrued interest in respect
thereof, all accrued and unpaid Fees and other indebtedness or obligations owing
to the Administrative Agent and/or any of the Lenders hereunder automatically
shall immediately become due and payable without the giving of any notice or
other action by the Administrative Agent or the Lenders.

SECTION 10

AGENCY PROVISIONS
-----------------

10.1 Appointment, Powers and Immunities.
----------------------------------

Each Lender hereby irrevocably appoints and authorizes the Administrative
Agent to act as its agent under this Credit Agreement and the other Credit
Documents with such powers and discretion as are specifically delegated to the
Administrative Agent by the terms of this Credit Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental thereto.
Each Lender further authorizes and directs the Administrative Agent to execute
and deliver releases (or similar agreements) to give effect to the provisions of
this Credit Agreement and the other Credit Documents, including specifically,
without limitation, the provisions of Section 8.5 hereof. The Administrative
Agent (which term as used in this sentence and in Section 10.5 and the first
sentence of Section 10.6 shall include its affiliates and its own and its
affiliates' officers, directors, employees, and agents): (a) shall not have any
duties or responsibilities except those expressly set forth in this Credit
Agreement and shall not be a trustee or fiduciary for any Lender; (b) shall not
be responsible to the Lenders for any recital, statement, representation, or
warranty (whether written or oral) made in or in connection with any Credit
Document or any certificate or other document referred to or provided for in, or
received by any of them under, any Credit Document, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of any Credit
Document, or any other document referred to or provided for therein or for any
failure by any Credit Party or any other Person to perform any of its
obligations thereunder; (c) shall not be responsible for or have any duty to
ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any Credit Party or the satisfaction of any condition
or to inspect the property (including the books and records) of any Credit Party
or any of its Subsidiaries or Affiliates; (d) shall not be required to initiate
or conduct any litigation or collection proceedings under any Credit Document;
and (e) shall not be responsible for any action taken or omitted to be taken by
it under or in connection with any Credit Document, except for its own gross
negligence or willful misconduct. The Administrative Agent may employ agents
and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. The titles of Syndication Agent and Documentation Agent are
bestowed in recognition of the participation in this credit by the Syndication
Agent and the Documentation Agent, and such title shall not impose or imply any
duties or responsibilities whatsoever of the

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<PAGE>

Syndication Agent or the Documentation Agent, in their respective capacity as
such, to the Borrower, the Guarantors, the Administrative Agent or the Lenders.

10.2 Reliance by Administrative Agent.
--------------------------------

The Administrative Agent shall be entitled to rely upon any certification,
notice, instrument, writing, or other communication (including, without
limitation, any thereof by telephone or telecopy) believed by it to be genuine
and correct and to have been signed, sent or made by or on behalf of the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel for any Credit Party), independent accountants, and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note as the holder thereof for all purposes hereof unless
and until the Administrative Agent receives and accepts an Assignment and
Acceptance executed in accordance with Section 11.3(b) hereof. As to any
matters not expressly provided for by this Credit Agreement, the Administrative
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding on all of the Lenders; provided,
--------
however, that the Administrative Agent shall not be required to take any action
- -------
that exposes the Administrative Agent to personal liability or that is contrary
to any Credit Document or applicable law or unless it shall first be indemnified
to its satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking any such action.

10.3 Defaults.
--------

The Administrative Agent shall not be deemed to have knowledge or notice
of the occurrence of a Default or Event of Default unless the Administrative
Agent has received written notice from a Lender or a Credit Party specifying
such Default or Event of Default and stating that such notice is a "Notice of
Default". In the event that the Administrative Agent receives such a notice of
the occurrence of a Default or Event of Default, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall
(subject to Section 10.2) take such action with respect to such Default or Event
of Default as shall reasonably be directed by the Required Lenders (or such
other Lenders as required by Section 11.6), provided that, unless and until the
-------- ----
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interest of the Lenders.

10.4 Rights as a Lender.
------------------

With respect to its Commitment and the Loans made by it, Bank of America
(and any successor acting as Administrative Agent) in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as the Administrative
Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include the Administrative Agent in its individual capacity. Bank of
America (and any successor acting as Administrative Agent) and its affiliates
may

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<PAGE>

(without having to account therefor to any Lender) accept deposits from, lend
money to, make investments in, provide services to, and generally engage in any
kind of lending, trust, or other business with any Credit Party or any of its
Subsidiaries or Affiliates as if it were not acting as Administrative Agent, and
Bank of America (and any successor acting as Administrative Agent) and its
affiliates may accept fees and other consideration from any Credit Party or any
of its Subsidiaries or Affiliates for services in connection with this Credit
Agreement or otherwise without having to account for the same to the Lenders.

10.5 Indemnification.
---------------

The Lenders agree to indemnify the Administrative Agent (to the extent not
reimbursed under Section 11.5 hereof, but without limiting the obligations of
the Credit Parties under Section 11.5) ratably (in accordance with their
respective Revolving Commitments (or, if the Revolving Commitments have been
terminated, the outstanding Revolving Loans, Swingline Loans and Participation
Interests in Letters of Credit and Swingline Loan (including the Participation
Interests of the Issuing Lender in Letters of Credit and the Participation
Interests of the Swingline Lender in Swingline Loans)) for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including attorneys' fees), or disbursements of any kind and
nature whatsoever that may be imposed on, incurred by or asserted against the
Administrative Agent (including by any Lender) in any way relating to or arising
out of any Credit Document or the transactions contemplated thereby or any
action taken or omitted by the Administrative Agent under any Credit Document;
provided that no Lender shall be liable for any of the foregoing to the extent
- --------
they arise from the gross negligence or willful misconduct of the Person to be
indemnified. Without limitation of the foregoing, each Lender agrees to
reimburse the Administrative Agent promptly upon demand for its ratable share of
any costs or expenses payable by the Credit Parties under Section 11.5, to the
extent that the Administrative Agent is not promptly reimbursed for such costs
and expenses by the Credit Parties. The agreements in this Section 10.5 shall
survive the repayment of the Loans, LOC Obligations and other obligations under
the Credit Documents and the termination of the Commitments hereunder.

10.6 Non-Reliance on Administrative Agent and Other Lenders.
------------------------------------------------------

Each Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Credit Parties and their Subsidiaries and decision to enter into this Credit
Agreement and that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under the Credit
Documents. Except for notices, reports, and other documents and information
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition, or business of any Credit Party or any of its Subsidiaries
or Affiliates that may come into the possession of the Administrative Agent or
any of its affiliates.

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<PAGE>

10.7 Successor Administrative Agent.
------------------------------

The Administrative Agent may resign at any time by giving notice thereof
to the Lenders and the Credit Parties. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty (30) days after
the retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be a commercial bank organized under the laws
of the United States having combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor, such successor shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges, and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Section 10 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.

SECTION 11

MISCELLANEOUS
-------------

11.1 Notices.
-------

Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Credit Parties and the
Administrative Agent, set forth below, and, in the case of the Lenders, set
forth on Schedule 11.1, or at such other address as such party may specify by
-------------
written notice to the other parties hereto:

if to any Credit Party:

Snyder Communications, Inc.
6903 Rockledge Drive
Bethesda, Maryland 20817
Attn: David Pauken
Telephone: (301) 571-6265
Telecopy: (301) 571-7985

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<PAGE>

with a copy to:

Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, New York 10153
Attn: Norman D. Chirite, Esq.
Telephone: (212) 310-8940
Telecopy: (212) 833-3037

if to the Administrative Agent:

Bank of America, N.A.
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attn: Elizabeth S. Garver
Agency Services
Telephone: (704) 386-8451
Telecopy: (704) 386-9923

with a copy to:

Bank of America, N.A.
6610 Rockledge Drive, 6th Floor
MD2-600-06-13
Bethesda, Maryland 20817-1876
Attn: Michael R. Heredia
Telephone: (301) 571-0724
Telecopy: (301) 571-0719

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<PAGE>

11.2 Right of Set-Off; Adjustments.
-----------------------------

Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its affiliates) is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender (or any
of its affiliates) to or for the credit or the account of any Credit Party
against any and all of the obligations of such Person now or hereafter existing
under this Credit Agreement, under the Notes, under any other Credit Document or
otherwise, irrespective of whether such Lender shall have made any demand under
hereunder or thereunder and although such obligations may be unmatured. Each
Lender agrees promptly to notify any affected Credit Party after any such set-
off and application made by such Lender; provided, however, that the failure to
-------- -------
give such notice shall not affect the validity of such set-off and application.
The rights of each Lender under this Section 11.2 are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that such Lender may have.

11.3 Benefit of Agreement.
--------------------

(a) This Credit Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided that none of the Credit Parties may assign or
--------
transfer any of its interests and obligations without prior written
consent of each of the Lenders; provided further that the rights of each
-------- -------
Lender to transfer, assign or grant participations in its rights and/or
obligations hereunder shall be limited as set forth in this Section 11.3.

(b) Each Lender may assign to one or more Eligible Assignees all or
a portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Loans, its Notes,
and its Commitment); provided, however, that
-------- -------

(i) each such assignment shall be to an Eligible Assignee;

(ii) except in the case of an assignment to another Lender,
an affiliate of an existing Lender or any fund that invests in bank
loans and is advised or managed by an investment advisor to an
existing Lender or an assignment of all of a Lender's rights and
obligations under this Credit Agreement, any such partial assignment
shall be in an amount at least equal to $5,000,000 (or, if less, the
remaining amount of the Commitment being assigned by such Lender) or
an integral multiple of $1,000,000 in excess thereof;

(iii) any such assignment shall be of a constant, not varying,
percentage of all of the Obligations and Commitments hereunder; and

(iv) the parties to such assignment shall execute and deliver
to the Administrative Agent for its acceptance an Assignment and
Acceptance in the form of Schedule 11.3(b) hereto, together with any
----------------
Note subject to such assignment and a processing fee of $3,500.

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<PAGE>

Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations, rights, and benefits of a
Lender hereunder and the assigning Lender shall, to the extent of such
assignment, relinquish its rights and be released from its obligations
under this Credit Agreement. Upon the consummation of any assignment
pursuant to this Section 11.3(b), the assignor, the Administrative Agent
and the Credit Parties shall make appropriate arrangements so that, if
required, new Notes are issued to the assignor and the assignee. If the
assignee is not a United States person under Section 6701(a)(30) of the
Internal Revenue Code, it shall deliver to the Credit Parties and the
Administrative Agent certification as to exemption from deduction or
withholding of Taxes in accordance with Section 3.11.

(c) The Administrative Agent shall maintain at its address referred
to in Section 11.1 a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of
the Loans owing to, each Lender from time to time (the "Register"). The
--------
entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Credit Parties, the Administrative Agent
and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Credit Agreement.
The Register shall be available for inspection by the Credit Parties or
any Lender at any reasonable time and from time to time upon reasonable
prior notice. Any assignment of any Loans, Commitments or other
obligations shall be effective only upon an entry with respect thereto
being made in the Register.

(d) Upon its receipt of an Assignment and Acceptance executed by
the parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the
form of Schedule 11.3(b) hereto, (i) accept such Assignment and
----------------
Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the parties thereto.

(e) Each Lender may sell participations to one or more Persons in
all or a portion of its rights, obligations or rights and obligations
under this Credit Agreement (including all or a portion of its Commitment
or its Loans); provided, however, that (i) such Lender's obligations under
-------- -------
this Credit Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) the participant shall be entitled to the
benefit of the yield protection provisions contained in Sections 3.7
through 3.12, inclusive, and the right of set-off contained in Section
11.2 (provided that such participant shall not be entitled to receive a
greater amount than the Lender from who it purchased such participation
would otherwise be entitled to receive), and (iv) the Credit Parties shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Credit Agreement, and such
Lender shall retain the sole right to enforce the obligations of the
Credit Parties under the Credit Documents owing to such Lender and to

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<PAGE>

approve any amendment, modification, or waiver of any provision of this
Credit Agreement (other than amendments, modifications, or waivers
decreasing the amount of principal of or the rate at which interest is
payable on such Loans or Notes, extending any scheduled principal payment
date or date fixed for the payment of interest on such Loans or Notes, or
extending its Commitment).

(f) Notwithstanding any other provision set forth in this Credit
Agreement, any Lender may at any time assign and pledge all or any portion
of its Loans and its Notes to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular issued by
such Federal Reserve Bank. No such assignment shall release the assigning
Lender from its obligations hereunder.

(g) Any Lender may furnish any information concerning the members
of the Consolidated Group in the possession of such Lender from time to
time to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 11.14
hereof.

11.4 No Waiver; Remedies Cumulative.
------------------------------

No failure or delay on the part of the Administrative Agent or any Lender
in exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Administrative Agent or any Lender
and any of the Credit Parties shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies provided herein are cumulative and not exclusive of any
rights or remedies which the Administrative Agent or any Lender would otherwise
have. No notice to or demand on any Credit Party in any case shall entitle the
Credit Parties to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent
or the Lenders to any other or further action in any circumstances without
notice or demand.

11.5 Expenses; Indemnification.
-------------------------

(a) The Credit Parties jointly and severally agree to pay within 30 days
upon presentation of an invoice all reasonable costs and expenses of the
Administrative Agent in connection with the syndication, preparation, execution,
delivery, administration, modification, and amendment of this Credit Agreement,
the other Credit Documents, and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of counsel for
the Administrative Agent (including the reasonable cost of internal counsel)
with respect thereto and with respect to advising the Administrative Agent as to
its rights and responsibilities under the Credit Documents. The Credit Parties
further jointly and severally agree to pay within 30 days upon presentation of
an invoice all reasonable costs and expenses of the Administrative Agent and the
Lenders, if any (including, without limitation, reasonable attorneys' fees and
expenses and the reasonable cost of internal counsel), in connection with the
enforcement (whether through negotiations, legal proceedings, or otherwise) of
the Credit Documents and the other documents to be delivered thereunder.

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<PAGE>

(b) The Credit Parties jointly and severally agree to indemnify and hold
harmless the Administrative Agent and each Lender and each of their affiliates
and their respective officers, directors, employees, agents, and advisors (each,
an "Indemnified Party") from and against any and all claims, damages, losses,
-----------------
liabilities, costs, and expenses (including, without limitation, reasonable
attorneys' fees) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation, or proceeding or preparation of defense in connection therewith) the
Credit Documents, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Loans, except to the extent such claim,
damage, loss, liability, cost, or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the indemnity in this
Section 11.5 applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by any of the Credit Parties,
their respective directors, shareholders or creditors or an Indemnified Party or
any other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. The Credit
Parties agree not to assert any claim against the Administrative Agent, any
Lender, any of their affiliates, or any of their respective directors, officers,
employees, attorneys, agents, and advisors, on any theory of liability, for
special, indirect, consequential, or punitive damages arising out of or
otherwise relating to the Credit Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans.

(c) Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit Parties
contained in this Section 11.5 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.

11.6 Amendments, Waivers and Consents.
--------------------------------

Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided, however, that:
-------- -------

(a) without the consent of each Lender affected thereby, neither
this Credit Agreement nor any other Credit Document may be amended to

(i) extend the final maturity of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,

(ii) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or Fees hereunder,

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<PAGE>

(iii) reduce or waive the principal amount of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,

(iv) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver of any
Default or Event of Default or mandatory reduction in the Commitments
shall not constitute a change in the terms of any Commitment of any
Lender),

(v) release the Borrower or, except as the result of or in
connection with a dissolution, merger or disposition of a member of
the Consolidated Group permitted under Section 8.4, any Material
Subsidiary or substantially all of the other Credit Parties from its
or their obligations under the Credit Documents,

(vi) amend, modify or waive any provision of this Section 11.6
or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15,
9.1(a), 11.2, 11.3, 11.5 or 11.9,

(vii) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders, or

(viii) consent to the assignment or transfer by the Borrower,
any Material Subsidiary or all or substantially all of the other
Credit Parties of any of its or their rights and obligations under (or
in respect of) the Credit Documents except as permitted thereby;

(b) without the consent of the Administrative Agent, no provision
of Section 10 may be amended; and

Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to
vote as such Lender sees fit on any bankruptcy reorganization plan that
affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to
allow a Credit Party to use cash collateral in the context of a bankruptcy
or insolvency proceeding.

11.7 Counterparts.
------------

This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by

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<PAGE>

any of the parties hereto of an executed counterpart of this Credit Agreement
shall be as effective as an original executed counterpart hereof and shall be
deemed a representation that an original executed counterpart hereof will be
delivered.

11.8 Headings.
--------

The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.

11.9 Survival.
--------

All indemnities set forth herein, including, without limitation, in Section
2.6(h), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and delivery of
this Credit Agreement, the making of the Loans, the issuance of the Letters of
Credit, the repayment of the Loans, LOC Obligations and other obligations under
the Credit Documents and the termination of the Commitments hereunder, and all
representations and warranties made by the Credit Parties herein shall survive
delivery of the Notes and the making of the Loans hereunder.

11.10 Governing Law; Submission to Jurisdiction; Venue.
------------------------------------------------

(a) THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY PROVIDED
THEREIN, THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any legal
action or proceeding with respect to this Credit Agreement or any other Credit
Document may be brought in the State or Federal courts located in New York, New
York, and, by execution and delivery of this Credit Agreement, each of the
Credit Parties hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the nonexclusive jurisdiction of such
courts. Each of the Credit Parties further irrevocably consents to the service
of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to it at the address set out for notices pursuant to Section
11.1, such service to become effective three (3) days after such mailing.
Nothing herein shall affect the right of the Administrative Agent or any Lender
to serve process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against any Credit Party in any other
jurisdiction.

(b) Each of the Credit Parties hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts referred to
in subsection (a) above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.

(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE ADMINISTRATIVE AGENT, THE
LENDERS AND EACH OF THE CREDIT PARTIES HEREBY IRREVOCABLY

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WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.

11.11 Severability.
------------

If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.

11.12 Entirety.
--------

This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.

11.13 Binding Effect; Termination.
---------------------------

(a) This Credit Agreement shall become effective at such time on or after
the Closing Date when it shall have been executed by each Credit Party and the
Administrative Agent, and the Administrative Agent shall have received copies
hereof (telefaxed or otherwise) which, when taken together, bear the signatures
of each Lender, and thereafter this Credit Agreement shall be binding upon and
inure to the benefit of each Credit Party, the Administrative Agent and each
Lender and their respective successors and assigns.

(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the other
Credit Documents shall remain outstanding, no Letters of Credit shall be
outstanding have been irrevocably satisfied in full and all of the Commitments
hereunder shall have expired or been terminated.

11.14 Confidentiality.
---------------

The Administrative Agent and each Lender (each, a "Lending Party") agrees
-------------
to keep confidential any information furnished or made available to it by the
Credit Parties pursuant to this Credit Agreement that is marked confidential;
provided that nothing herein shall prevent any Lending Party from disclosing
- --------
such information (a) to any other Lending Party or any affiliate of any Lending
Party, or any officer, director, employee, agent, or advisor of any Lending
Party or affiliate of any Lending Party, (b) to any other Person if reasonably
incidental to the administration of the credit facility provided herein, (c) as
required by any law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory agency
or authority, (f) that is or becomes available to the public or that is or
becomes available to any Lending Party other than as a result of a disclosure by
any Lending Party prohibited by this Credit Agreement, (g) in connection with
any litigation to

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which such Lending Party or any of its affiliates may be a party, (h) to the
extent necessary in connection with the exercise of any remedy under this Credit
Agreement or any other Credit Document, (i) to the National Association of
Insurance Commissioners or any similar organization or any nationally recognized
rating agency that requires access to information about a Lender's investment
portfolio in connection with ratings issued with respect to such Lender, (j) to
any direct or indirect contractual counterparty in swap agreements or such
contractual counterparty's professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty (i) has
been approved in writing by the Borrower and (ii) agrees in a writing
enforceable by the Borrower to be bound by the provisions of this Section 11.14)
and (k) subject to provisions substantially similar to those contained in this
Section 11.14, to any actual or proposed participant or assignee.

11.15 Source of Funds.
---------------

Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:

(a) no part of such funds constitutes assets allocated to any
separate account maintained by such Lender in which any employee benefit
plan (or its related trust) has any interest;

(b) to the extent that any part of such funds constitutes assets
allocated to any separate account maintained by such Lender, such Lender
has disclosed to the Borrower the name of each employee benefit plan
whose assets in such account exceed 10% of the total assets of such
account as of the date of such purchase (and, for purposes of this
subsection (b), all employee benefit plans maintained by the same
employer or employee organization are deemed to be a single plan);

(c) to the extent that any part of such funds constitutes assets of
an insurance company's general account, such insurance company has
complied with all of the requirements of the regulations issued under
Section 401(c)(1)(A) of ERISA; or

(d) such funds constitute assets of one or more specific benefit
plans which such Lender has identified in writing to the Borrower.

As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.

11.16 Conflict.
--------

To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.

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[Signature Page to Follow]

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.

BORROWER: SNYDER COMMUNICATIONS, INC.,
- -------- a Delaware corporation

By:
-------------------------
Name:
Title:

GUARANTORS: AMERICAN STUDENT LIST CO. INC.,
- ---------- a __________ corporation
ARNOLD COMMUNICATIONS, INC.,
a __________ corporation
BLAU MARKETING TECHNOLOGIES, INC.,
a __________ corporation
BROADWELL MARKETING GROUP, INC.,
a __________ corporation
MEDIA SYNDICATION GLOBAL, INC.,
a __________ corporation
NATIONAL SALES SERVICES, INC.,
a __________ corporation
NATURAL INTELLIGENCE, INC.,
a __________ corporation
RESPONSE MARKETING GROUP, LLC,
a __________ corporation
SAMPLING CORPORATION OF AMERICA,
a __________ corporation
SNYDER DIRECT SERVICES, INC.,
a __________ corporation
TSUNAMI CONSULTING GROUP, INC.,
a __________ corporation
SNYDER MARKETING SERVICES, INC.,
a __________ corporation

By:
-------------------------
Name:
Title:
of each of the foregoing Guarantors

[Signature Pages Continue]
<PAGE>

LENDERS: BANK OF AMERICA, N.A.,
- ------- individually in its capacity as a
Lender and in its capacity as Administrative Agent

By:
---------------------------------
Name:
Title:

THE FIRST NATIONAL BANK OF CHICAGO

By:
---------------------------------
Name:
Title:

BANKERS TRUST COMPANY

By:
---------------------------------
Name:
Title:

THE CHASE MANHATTAN BANK

By:
---------------------------------
Name:
Title:

FIRST UNION NATIONAL BANK

By:
---------------------------------
Name:
Title:

CRESTAR BANK

By:
---------------------------------
Name:
Title:

<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

Vienna, VA
August 31, 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 Amendment No. 2 to 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

August 27, 1999

<PAGE>

EXHIBIT 23.3

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Amendment No. 2 to 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

August 27, 1999