<PAGE>
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
VENTIV HEALTH, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
VENTIV HEALTH, INC.
1114 Avenue of the Americas
New York, New York 10036
-----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 31, 2000
-----------------
April 27, 2000
To Our Stockholders:
You are cordially invited to attend the 2000 Annual Meeting of Stockholders
of Ventiv Health, Inc. (the "Company") to be held at the Company's corporate
offices 1114 Avenue of the Americas, 8th floor, New York, NY, on May 31, 2000,
at 3:00 p.m., local time, for the following purposes:
1. To elect eight (8) directors of the Company;
2. To approve the Stock Incentive Plan;
3. To ratify the appointment of Arthur Andersen LLP as the Company's
independent auditors for 2000; and
4. To transact such other business as may properly come before the
meeting.
Only stockholders of record at the close of business on April 3, 2000 will
be entitled to notice of, and to vote at, the meeting.
YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL
MEETING, PLEASE FILL IN, SIGN, DATE AND MAIL THE ENCLOSED PROXY AS PROMPTLY AS
POSSIBLE.
IF YOU DO NOT PLAN TO ATTEND THE ANNUAL 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 ANNUAL MEETING BY
SHOWING YOUR MOST RECENT BROKERAGE STATEMENT VERIFYING YOUR OWNERSHIP OF
COMMON STOCK.
By Order of the Board of
Directors,
Gregory S. Patrick
Secretary
<PAGE>
VENTIV HEALTH, INC.
1114 Avenue of the Americas
New York, New York 10036
-----------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 31, 2000
-----------------
PROXY STATEMENT
-----------------
GENERAL INFORMATION
Proxy Solicitation
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Ventiv Health, Inc. (the "Company") for
use at the 2000 Annual Meeting of Stockholders to be held at the Company's
corporate offices, 1114 Avenue of the Americas, 8th floor, New York, NY, on
May 31, 2000, at 3:00 p.m., local time. The purpose of the meeting and the
matters to be acted upon are set forth in the accompanying Notice of Annual
Meeting.
The Company is mailing its Annual Report to Stockholders for the year ended
December 31, 1999, along with this Proxy Statement and the enclosed proxy. The
1999 Annual Report to Stockholders does not form any part of the materials for
the solicitation of proxies.
The Company will pay the cost of all proxy solicitations. In addition to the
solicitation of proxies by mail, officers and other employees of the Company
and its subsidiaries may solicit proxies by personal interview, telephone,
telecopy and telegram. None of these individuals will receive compensation for
such services, which will be performed in addition to their regular duties.
Also, the Company has made arrangements with brokerage firms, banks, nominees
and other fiduciaries to forward proxy solicitation material for shares held
of record by them to the beneficial owners of such shares. The Company will
reimburse such persons for their reasonable out-of-pocket expenses in
forwarding such material.
This Proxy Statement and the enclosed proxy are first being mailed to the
Company's stockholders on or about April 27, 2000.
Voting and Revocability of Proxies
A proxy for use at the meeting and a return envelope are enclosed. Shares of
common stock of the Company, par value $0.001 (the "Common Stock"),
outstanding as of the record date for the meeting and represented by a
properly executed proxy, if such proxy is timely received and not revoked,
will be voted at the meeting in accordance with the instructions indicated in
such proxy. If no such instructions are indicated, such shares will be voted
"FOR" the election of the eight nominees for director named in the proxy. For
purposes of determining the number of votes with respect to the other matters
submitted to stockholders, only those cast "FOR" or "AGAINST" are included.
Abstentions and broker non-votes are counted only for purposes of determining
whether a quorum is present at the meeting. Discretionary authority is
provided in the proxy as to any matters not specifically referred to therein.
Except for the
1
<PAGE>
matters discussed in this Proxy Statement and reflected in the proxy,
management is not aware of any other matters which are likely to be brought
before the meeting. If any such matters properly come before the meeting,
however, the persons named in the proxy are fully authorized to vote thereon in
accordance with their judgment and discretion.
A stockholder who has given a proxy may revoke it at any time prior to its
exercise at the meeting by (1) giving written notice of revocation to the
Secretary of the Company, (2) properly submitting to the Company a duly
executed proxy bearing a later date or (3) voting in person at the meeting. All
written notices of revocation or other communications with respect to
revocation of proxies should be addressed as follows: Ventiv Health, Inc., 1114
Avenue of the Americas, New York, New York 10036, Attention: Corporate
Secretary.
Voting Procedures
All holders of record of the Common Stock of the Company at the close of
business on April 3, 2000 (the "Record Date") will be eligible to vote at the
meeting. Each holder of Common Stock is entitled to one vote at the meeting for
each share held by such stockholder on the Record Date. As of the Record Date,
there were 23,296,293 shares of Common Stock outstanding. Only shares that are
voted in favor of a particular nominee will be counted toward such nominee's
achievement of a majority, except that the accompanying proxy will be voted for
the eight nominees in the absence of instructions to the contrary.
Consequently, shares present at the meeting that are not voted for a particular
nominee or shares present by proxy where the stockholder properly withheld
authority to vote for such nominee (including broker non-votes) will not be
counted toward such nominee's achievement of a majority.
The presence, in person or by proxy, of a majority of the outstanding shares
of Common Stock entitled to vote at the meeting will constitute a quorum for
the transaction of business. Votes cast in person or by proxy, abstentions and
broker non-votes (as hereinafter defined) will be tabulated by the inspectors
of election and will be considered in the determination of whether a quorum is
present at the meeting. At all meetings of the stockholders at which a quorum
is present, all matters are decided by the vote of the holders of a majority of
the shares entitled to vote thereat present in person or by proxy.
The inspectors of election will treat shares represented by executed proxies
that abstain from voting as shares that are present and entitled to vote for
purposes of determining whether a matter is approved. If, with respect to any
shares of Common Stock, a broker or other nominee submits a proxy indicating
that instructions have not been received from the beneficial owners or the
persons entitled to vote, and that such broker or other nominee does not have
discretionary authority to vote such shares (a "broker non-vote") on a
proposal, those shares will not be treated as present and entitled to vote at
the meeting for purposes of determining whether a proposal is approved at the
meeting.
Voting of Proxies
Stockholders are requested to complete, date, sign and promptly return the
accompanying form of proxy in the enclosed envelope. Shares of Common Stock
represented by properly executed proxies received by the Company and not
revoked will be voted at the meeting in accordance with the instructions
contained therein. If instructions are not given, proxies will be voted "FOR"
election of each nominee for director named herein. For purposes of determining
the number of votes cast with respect to the matters presented to the
stockholders at the meeting other than the election of directors, only those
cast "FOR" or "AGAINST" are included. Abstentions and broker non-votes are
counted only for purposes of determining whether a quorum is present at the
meeting.
2
<PAGE>
ELECTION OF DIRECTORS
Nominees for Election as Directors
The Certificate of Incorporation and Bylaws of the Company provide that
directors shall be elected at the 2000 Annual Meeting of Stockholders. The
number of directors constituting the full Board of Directors currently is fixed
at eight (8) directors.
Eight (8) nominees are named in this Proxy Statement. If elected, each of the
directors will serve for a one-year term expiring at the 2001 Annual Meeting or
at the earlier of either his or her resignation or removal. The Board of
Directors has nominated the eight (8) incumbent directors for election to the
Board: Daniel M. Snyder, Michele D. Snyder, Eran Broshy, Mortimer B. Zuckerman,
Fred Drasner, A. Clayton Perfall, Donald Conklin and John R. Harris.
Approval of the election of each of the nominees as directors of the Company
requires the affirmative vote of a majority of the votes cast at the Annual
Meeting. The persons named in the enclosed form of proxy have advised that,
unless contrary instructions are received, they intend to vote "FOR" the eight
(8) nominees named by the Board of Directors.
The Board of Directors does not expect that any of the nominees will be
unavailable for election as a director. However, if by reason of an unexpected
occurrence one or more of the nominees is not available for election, the
persons named in the form of proxy have advised that they will vote for such
substitute nominees as the Board of Directors of the Company may propose. The
following information is as of March 31, 2000.
<TABLE>
<CAPTION>
Age, period served as director, other business
experience
Name and present position, during the last five years and family
if any, with the Company relationships, if any
- -------------------------- ----------------------------------------------
<S> <C>
Daniel M. Snyder,
Co-Chairperson of the Board..... Daniel M. Snyder, 35, has served as the Co-
Chairperson of the Board of the Company since the
Company's separation from Snyder Communications,
Inc. on September 27, 1999. Mr. Snyder is a
founder of Snyder Communications, Inc., and serves
as Chairman of the Board of Directors and Chief
Executive Officer of Snyder Communications, Inc.
Michele D. Snyder,
Co-Chairperson of the Board..... Michele D. Snyder, 37, has served as the Co-
Chairperson of the Board of the Company since the
Company's separation from Snyder Communications,
Inc. Ms. Snyder is a founder of Snyder
Communications, Inc. and serves as Vice Chairman,
President and Chief Operating Officer and a
director of Snyder Communications, Inc. Ms. Snyder
is Mr. Snyder's sister.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Age, period served as director, other business
experience
Name and present position, during the last five years and family
if any, with the Company relationships, if any
- -------------------------- ----------------------------------------------
<S> <C>
Eran Broshy,
Director and Chief Executive
Officer......................... Eran Broshy, 41, has served as a director and the
Chief Executive Officer of the Company since the
Company's separation from Snyder Communications,
Inc. Mr. Broshy previously served as the practice
leader of the North American healthcare consulting
practice of the Boston Consulting Group from 1991
to 1998. From 1998 to 1999, Mr. Broshy served as
President and Chief Executive Officer of
Coelacanth Corporation, a privately-held
biotechnology company.
Mortimer B. Zuckerman,
Director........................ Mortimer B. Zuckerman, 62, has been a director of
the Company since the Company's separation from
Snyder Communications, Inc. Mr. Zuckerman is a
director of Snyder Communications, Inc. and is the
Chairman of Boston Properties, Inc., a national
real estate development and management company. He
also serves as Chairman of U.S. News & World
Report, L.P. and Editor-in-Chief of U.S. News &
World Report, Chairman of Daily News, L.P. and Co-
Publisher of the New York Daily News, Chairman of
The Atlantic Monthly Company and Chairman of the
Board of Directors of Applied Graphics
Technologies, Inc.
Fred Drasner,
Director........................ Fred Drasner, 57, has been a director of the
Company since the Company's separation from Snyder
Communications, Inc. Mr. Drasner is a director of
Snyder Communications, Inc., Chief Executive
Officer of Daily News, L.P. and Co-Publisher of
the New York Daily News. Mr. Drasner served as the
President of U.S. News & World Report, L.P. from
1985 to February 1997 and has served as Chief
Executive Officer of U.S. News & World Report
since 1985. He also serves as the Chairman and
Chief Executive Officer of Applied Graphics
Technologies, Inc., Chief Executive Officer of
Applied Printing Technologies, L.P. and Vice-
Chairman and Chief Executive Officer of The
Atlantic Monthly Company.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Age, period served as director, other business
experience
Name and present position, during the last five years and family
if any, with the Company relationships, if any
- -------------------------- ----------------------------------------------
<S> <C>
A. Clayton Perfall,
Director........................ A. Clayton Perfall, 41, has been a director of the
Company since the Company's separation from Snyder
Communications, Inc. Mr. Perfall is the Chief
Financial Officer and a director of Snyder
Communications, Inc. Prior to joining Snyder
Communications, Inc. in 1996, Mr. Perfall spent
fifteen years with Arthur Andersen LLP.
Donald Conklin,
Director........................ Donald Conklin, 63, has been a director of the
Company since the Company's separation from Snyder
Communications, Inc. Prior to joining the
Company's board in 1999, Mr. Conklin worked 37
years with Schering-Plough Corporation, where he
held a number of senior positions in management
and marketing, most recently as Chairman of its
Health Care Products division. Mr. Conklin is a
member of the Board of Directors of Biotransplant,
Inc., Vertex Pharmaceuticals, Inc. and Alfa Cell,
Inc.
John R. Harris,
Director........................ John R. Harris, 51, is Chief Executive Officer,
President and Director of Ztango.com, a provider
of wireless Internet software and solutions for e-
companies, wireless network operators and
corporations. Prior to joining Ztango.com,
Mr. Harris spent 25 years with Electronic Data
Systems, during which he held a variety of
executive leadership positions encompassing sales,
marketing, strategy and operations, most recently
Corporate Vice President, Marketing & Strategy.
Mr. Harris is a member of the Board of Directors
of Applied Graphics Corporation, Cap Rock
Communications and Convergent Media Systems.
</TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE
COMPANY VOTE "FOR" THE ELECTION OF EACH OF THE NOMINEES TO SERVE AS DIRECTORS
OF THE COMPANY FOR THE TERM INDICATED.
Compensation of Directors
The Company's independent directors received options to purchase shares of
the Company's Common Stock as follows: Each of Donald Conklin and John R.
Harris received options to purchase 50,000 shares of Common Stock and each of
Mortimer B. Zuckerman and Fred Drasner received options to purchase 100,000
shares of Common Stock. Each of the directors on the Executive Committee
received options to purchase shares of Company Common Stock as follows: A.
Clayton Perfall received options to purchase 100,000 shares of Common Stock and
each of Daniel M. Snyder and Michele D. Snyder received options to purchase
150,000 shares of Common Stock. All of the option grants described above vest
at a rate of 25% per year on the anniversary of the grant date, provided that
the director is still a member of the Board of Directors of the Company on the
applicable vesting date. In addition, these option grants fully vest upon
5
<PAGE>
a change of control. In addition, Donald Conklin receives compensation of
$25,000 per annum plus the sum of $1,000 per meeting attended.
Board of Directors and Committees of the Board
The Board of Directors held two (2) meetings during 1999. During 1999, each
director attended 100% of the aggregate of the total number of meetings of the
Board and the total number of meetings held by all committees of the Board on
which he or she served. In April 2000, the Board, by unanimous written consent,
voted to increase the number of directors constituting the entire Board from
seven (7) members to eight (8) members. The Board appointed John R. Harris to
fill the newly created directorship until the next annual meeting of
stockholders.
The Board of Directors currently has a standing Audit Committee and a
standing Compensation Committee.
The Audit Committee, which was established in September, 1999, upon the
Company's separation from Snyder Communications, Inc., currently consists of
Ms. Snyder and Messrs. Conklin (Chairperson) and Perfall. During 1999, the
Audit Committee held one meeting. It is intended that Mr. Harris will join the
Audit Committee upon his election to the Board of Directors. The Audit
Committee is responsible for recommending to the Board of Directors the
engagement of the Company's independent public accountants, reviewing the audit
plan and the results of each audit engagement with the independent public
accountants, reviewing the independence of the independent accountants,
reviewing the range of audit and non-audit fees, reviewing the adequacy of the
Company's internal accounting controls, and exercising oversight with respect
to the Company's code of conduct and other policies and procedures regarding
adherence with legal requirements, including compliance with Nasdaq listing
requirements on audit committees.
The Compensation Committee, which was established in September, 1999, upon
the Company's separation from Snyder Communications, Inc., currently consists
of Messrs. Drasner and Conklin. The Compensation Committee is responsible for
approving compensation arrangements for executive management, reviewing
compensation plans relating to officers of the Company and its subsidiaries,
grants of options and other benefits under the Company's Stock Incentive Plan
and reviewing generally the Company's employee compensation policy. During
1999, the Compensation Committee held three telephonic meetings.
Indemnification
Limitation of Liability of Directors
Section 145 of the Delaware General Corporation Law permits the
indemnification of directors, officers, employee and agents of a Delaware
corporation. The Company's by-laws provide that the Company shall indemnify its
directors and officers to the fullest extent permitted by the Delaware General
Corporation Law. As permitted by the Delaware General Corporation Law, the
Company's certificate of incorporation also limits the liability of directors
of the Company 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 the Company's or its
stockholders;
. for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
6
<PAGE>
. 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 the Company or to any liabilities imposed under federal securities
law.
Insurance
Pursuant to a contract of insurance for the period beginning September 13,
1999 and ending one year thereafter with Chubb Executive Risk, 8 Hop Meadow
Street, Simsbury, Connecticut 06070-7683, the Company maintains a $10,000,000
directors' and officers' indemnification insurance policy providing
indemnification for certain of the Company's directors, officers, affiliates,
partners and employees for certain liabilities. The annual premium for such
insurance is $150,000. In addition, pursuant to an additional contract of
insurance for the same such period with National Union Fire Insurance Company
of Pittsburgh, Pennsylvania, 70 Pine Street, New York, New York 10270, the
Company maintains a $10,000,000 directors' and officers' indemnification
insurance policy providing indemnification in excess of the Chubb policy for
certain of the Company's directors, officers, affiliates, partners and
employees for certain liabilities for an additional annual premium of $82,500.
During 1999, no payments were received under the Company's indemnification
insurance.
7
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information in respect of the compensation of
the Chief Executive Officer, the Chief Financial Officer and the other three
most highly compensated executive officers of the Company for fiscal year 1999
and 1998, where applicable.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation (Awards)
------------------------------ ----------------------------------
Restricted
Name and Other Annual Stock Securities Underlying All Other
Principal Position(s) Year Salary Bonus Compensation Award(s) ($) Options/SARs (#)(6) Compensation
- --------------------- ---- -------- -------- ------------ ------------ --------------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Eran Broshy,(1)......... 1999 $225,890 $ 75,000 $2,500,000 503,938
Chief Executive Officer
and Director
Gregory S. Patrick,(2) 1999 $ 83,562 $ 40,000 $1,000,000 251,969
Chief Financial Officer
Robert Brown,
Ph.D.,(3).............. 1999 $216,780 $ 75,000 $ 400,000 50,000
Chief Executive 1998 $210,000 100,000
Officer, Health
Products Research
William C. Pollock,(4).. 1999 $275,000 $158,125 $ 500,000 50,000
President, Healthcare
Sales 1998 $240,000 $155,000 75,000
Leonard Vicciardo (5)... 1999 $258,400 $150,000 $ 200,000 75,000
President, Health 1998 $ 36,381 90,000
Products Research
</TABLE>
- --------
(1) Mr. Broshy joined Snyder Communications, Inc., the predecessor that
conducted the business currently conducted by the Company, in June 1999.
Had Mr. Broshy been employed by the Company since the beginning of 1999,
he would have received an annual salary of $425,000. Of the 314,961 shares
awarded to Mr. Broshy pursuant to his restricted stock award, 62,992
shares representing twenty percent of Mr. Broshy's restricted shares of
Common Stock, having a value of $578,739 as of December 31, 1999, vested
on September 27, 1999. The balance of 251,969 shares representing the
remaining eighty percent of such restricted shares will vest in equal
installments over the next four years.
(2) Mr. Patrick joined the Company in September 1999. Had Mr. Patrick been
employed by the Company since the beginning of 1999, he would have
received an annual salary of $250,000. Of the 125,984 shares awarded to
Mr. Patrick pursuant to his restricted stock award, 50,394 shares
representing forty percent of Mr. Patrick's restricted shares of Common
Stock, having a value of $462,995 as of December 31, 1999, vested on
September 27, 1999. The balance of 75,590 shares representing the
remaining sixty percent of such restricted shares will vest in equal
installments over the next four years.
(3) Of the 50,394 shares awarded to Mr. Brown pursuant to his restricted stock
award, 20,158 shares representing forty percent of Mr. Brown's restricted
shares of Common Stock, having a value of $185,202 as of December 31,
1999, vested on September 27, 1999. The balance of 30,236 shares
representing the remaining sixty percent of such restricted shares will
vest in equal installments over the next four years. The 1998 issuance of
stock options of 100,000 for Mr. Brown consisted of options to purchase
shares of Snyder Communications, Inc. common stock, which expired as a
result of the separation of the Company from Snyder Communications, Inc.
8
<PAGE>
(4) Of the 62,992 shares awarded to Mr. Pollock pursuant to his restricted
stock award, 25,197 shares representing forty percent of Mr. Pollock's
restricted shares of Common Stock, having a value of $231,497 as of
December 31, 1999, vested on September 27, 1999. The balance of 37,795
shares representing the remaining sixty percent of such restricted shares
will vest in equal installments over the next four years. The 1998 issuance
of stock options of 75,000 for Mr. Pollock consisted of options to purchase
shares of Snyder Communications, Inc. common stock, which expired as a
result of the separation of the Company from Snyder Communications, Inc.
(5) Mr. Vicciardo joined Health Products Research, Inc. in November 1998. Had
Mr. Vicciardo been employed by Health Products Research, Inc. since the
beginning of 1998, he would have received an annual salary of $250,000. Of
the 25,197 shares awarded to Mr. Vicciardo pursuant to his restricted stock
award, 10,079 shares representing forty percent of Mr. Vicciardo's
restricted shares of Common Stock, having a value of $92,601 as of December
31, 1999, vested on September 27, 1999. The balance of 15,118 shares
representing the remaining sixty percent of such restricted shares will
vest in equal installments over the next four years. The 1998 issuance of
stock options of 90,000 for Mr. Vicciardo consisted of options to purchase
shares of Snyder Communications, Inc. common stock, which expired as a
result of the separation of the Company from Snyder Communications, Inc.
(6) Options to purchase Common Stock vest at a rate of 25% per year on each
anniversary of the grant date, provided the employee is still employed by
the Company on the applicable vesting date.
Option Grants in Fiscal 1999
The following table sets forth information with respect to option grants
during fiscal 1999 to the individuals named in the Summary Compensation Table
pursuant to the 1999 Stock Incentive Plan. No stock options were exercised in
1999.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Annual Compensation for Option Term
------------------------------------------------ ---------------------
% of Total
Securities options
Underlying Granted to Exercise
Options Granted Employees Price Expiration
Name (# of shares) (1) in 1999 ($/Sh) Date 5%($) 10%($)
---- ----------------- ---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Eran Broshy............. 503,938 14.4% 7.9375 9/27/09 $2,515,583 $6,374,982
Gregory S. Patrick...... 251,969 7.2% 7.9375 9/27/09 $1,257,792 $3,187,491
Robert Brown, Ph.D. .... 50,000 1.4% 7.9375 2/12/08 $ 204,149 $ 496,399
William C. Pollock...... 50,000 1.4% 7.9375 2/12/08 $ 204,149 $ 496,399
Leonard Vicciardo....... 75,000 2.1% 7.9375 12/14/08 $ 328,213 $ 808,403
</TABLE>
9
<PAGE>
BENEFICIAL OWNERSHIP OF SECURITIES
The following table sets forth certain information, to the knowledge of the
Company, as of April 3, 2000 (except as otherwise noted), with respect to the
beneficial ownership of the Common Stock by (i) each person known to the
Company to be the beneficial owner of more than 5% of the outstanding Common
Stock, (ii) each director and nominee for director, (iii) each of the
executive officers of the Company named in the Summary Compensation Table
under "Executive Compensation," and (iv) all directors and executive officers
of the Company as a group.
<TABLE>
<CAPTION>
Number of Shares
and Nature of Percent
Name of Beneficial Owner Beneficial Ownership of Class (1)
- ------------------------ -------------------- ------------
<S> <C> <C>
Daniel M. Snyder(2)......................... 3,276,541 13.4%
Michele D. Snyder(3)........................ 1,263,990 4.8%
Mortimer B. Zuckerman(4).................... 1,720,078 6.9%
Fred Drasner(5)............................. 883,535 3.4%
A. Clayton Perfall(6)....................... 100,000 *
Donald Conklin(7)........................... 50,000 *
Eran Broshy(8).............................. 863,899 1.5%
Gregory Patrick(9).......................... 377,954 *
Dr. Robert Brown(10)........................ 212,459 *
Leonard Vicciardo(11)....................... 100,197 *
William C. Pollock(12)...................... 125,423 *
Iridian Asset Management Co., LLC(13)....... 2,157,545 9.2%
Mellon Financial Corporation(14)............ 2,263,893 9.7%
Capital Research and Management Co.(15)..... 2,228,330 9.5%
All directors and executive officers as a
group (11 persons)(16)..................... 8,974,076 31.9%
</TABLE>
- --------
* Denotes less than 1%.
(1) Based upon 23,296,293 shares of Common Stock outstanding as of April 3,
2000, the record date.
(2) Includes 150,000 shares of common stock issuable upon exercise of options.
Includes 308,984 shares subject to a forward purchase contract with
unaffiliated third party. The contract obligates the contracting party to
deliver shares or cash on a pre-arranged settlement date. To the extent
that the value of the common stock appreciates between the date of the
contract and the settlement date, the number of shares or amount of cash
that must be delivered on the settlement date is reduced pursuant to a
formula contained in the contract. Prior to the settlement date, Mr.
Snyder or his affiliate described below retains voting and dividend rights
with respect to the shares that are the subject of the contract. Pursuant
to the contract, the settlement date is the third trading day following
July 30, 2001. The address for Daniel M. Snyder is 6903 Rockledge Drive,
15th Floor, Bethesda, Maryland, 20817.
(3) Includes 150,000 shares of common stock issuable upon exercise of options.
Includes 92,816 shares subject to a forward purchase contract with
unaffiliated third party. The contract obligates the contracting party to
deliver shares or cash on a pre-arranged settlement date. To the extent
that the value of the common stock appreciates between the date of the
contract and the settlement date, the number of shares or amount of cash
that must be delivered on the settlement date is reduced pursuant to a
formula contained in the contract. Prior to the settlement date, Ms.
Snyder or her affiliate described below retains voting and dividend rights
with respect to the shares that are the subject of the contract. Pursuant
to the contract, the settlement date is the third trading day following
July 30, 2001. The address for Michele D. Snyder is 6903 Rockledge Drive,
15th Floor, Bethesda, Maryland, 20817.
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(4) Consists of shares of common stock 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.
Includes 211,537 shares of common stock subject to a forward purchase
contract with an unaffiliated third party. The contract obligates the
contracting party to deliver shares or cash on the third trading day
following July 30, 2001. To the extent that the value of the common stock
appreciates between the date of the contract and its settlement date, the
number of shares or amount of cash that must be delivered on the settlement
date is reduced pursuant to a formula contained in the contract. Prior to
the settlement date, College Marketing retains voting and dividend rights
with respect to the shares that are the subject of the contract. Of the
211,537 shares, approximately 79.87% are attributable to USN Inc.'s
ownership interest in College Marketing and are beneficially owned by USN
Inc., and in turn, one-third of the shares beneficially owned by USN Inc.,
are beneficially owned by Mr. Zuckerman. Does not include 408,434 shares
held by College Marketing that are beneficially owned by Mr. Drasner. See
Note 5. Also includes 100,000 shares of common stock issuable upon exercise
of options. 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) Consists 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, (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 and (iv) 53,330
shares of common stock beneficially owned by Mr. Drasner are also subject
to the USN Contract. See Note 4. Of the USN Contract Shares referred to in
Note 4, approximately 20.13% are attributable to Mr. Drasner's ownership
interest in College Marketing and are beneficially owned by Mr. Drasner.
Also includes 100,000 shares of common stock issuable upon exercise of
options.
(6) Includes 100,000 shares of common stock issuable upon exercise of options.
(7) Consists of options to purchase 50,000 shares of Ventiv common stock.
(8) Includes 503,938 shares of common stock issuable upon exercise of options
and 251,969 shares of unvested, restricted stock.
(9) Includes 251,969 shares of common stock issuable upon exercise of options
and 75,590 shares of unvested, restricted stock.
(10) Includes 50,000 shares of common stock issuable upon exercise of options
and 30,236 shares of unvested, restricted stock.
(11) Includes 75,000 shares of common stock issuable upon exercise of options
and 15,118 shares of unvested, restricted stock.
(12) Includes 50,000 shares of common stock issuable upon exercise of options
and 37,795 shares of unvested, restricted stock.
(13) Ownership is as reported on Schedule 13G of Iridian Asset Management, LLC
("Iridian") and is as of February 7, 2000. Iridian's address is 276 Post
Road West, Westport, Connecticut 06880.
(14) Ownership is reported in Schedule 13G of Mellon Financial Corporation
("Mellon") and is as of January 27, 2000. Mellon's address is One Mellon
Center, Pittsburgh, Pennsylvania 15258.
(15) Ownership is as reported in Schedule 13G of Capital Research and
Management Co. ("Capital") and is as of February 11, 2000. Capital's
address is 333 South Hope Street, 55th Floor, Los Angeles, California
90071.
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(16) Includes 1,580,907 shares of common stock issuable upon exercise of
options and 410,708 shares of unvested, restricted stock. In calculating
the percent of class, all unvested shares of restricted stock are included
and it was assumed that each person in the group exercised all of his or
her exercisable options, but such percent does not assume exercise of any
other outstanding options.
REPORT OF THE BOARD OF DIRECTORS OF VENTIV HEALTH, INC.
ON EXECUTIVE COMPENSATION
In accordance with the rules of the Securities and Exchange Commission, the
Board of Directors of the Company offers this report regarding its executive
compensation policy and compensation program for the Chief Executive Officer
and other executive officers of the Company in effect for 1999. This report, as
well as the Performance Graph on page 15, are not soliciting materials, are not
deemed filed with the Securities and Exchange Commission and are not
incorporated by reference in any filing of the Company under the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), whether made before or after the date of this Proxy Statement
and irrespective of any general incorporation language in any such filing.
During 1999, the Board of Directors established the general compensation
policies of the Company and the specific compensation of its executive officers
including its Chief Executive Officer. The Compensation Committee of the Board
of Directors also administered the Company's Stock Incentive Plan during 1999
for the Company's officers and key employees.
Executive Compensation Policy
During 1999, in setting executive compensation, the objective of the Board of
Directors was to attract, retain and motivate highly qualified employees and
executive officers that contribute to growth in stockholder value over time. To
accomplish this objective, the Board of Directors seeks to provide strong
financial incentives to the Company's executive officers, at a reasonable cost
to the Company and its stockholders. Compensation currently consists
principally of salary, annual performance-based bonuses and stock options
granted under the Company's Stock Incentive Plan. In establishing certain
components of compensation, the Board of Directors seeks to provide the
Company's executive officers with a strong financial incentive aligned with the
business objectives and performance of the Company, thereby reflecting the
interests of the Company's stockholders.
Executive Officer Compensation
During 1999, the Company's compensation for its executive officers consisted
principally of salary and bonus. In setting base salaries for 1999, the Board
of Directors used a subjective evaluation process considering the officer's
position, level and scope of responsibility, as well as the recommendations of
management with respect to base salary for such executive officer. The Board of
Directors also sought to set salaries at levels that, in the opinion of the
members of the Board, approximate the salary levels for international health
services providers that are comparable to the Company. In addition, all of the
Company's executive officers have employment agreements that establish a base
salary, subject to such increases as may be approved by the Board of Directors
or the Compensation Committee of the Company. See "Executive Compensation--
Executive Employment Contracts."
Bonuses are awarded principally on the basis of the Company's performance
during the period and on the Board of Director's assessment of the extent to
which an executive officer contributed to the overall
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profitability of the Company or a particular operating division of the Company
for a specific period. In awarding performance-based bonuses, the Board of
Directors during 1999 sought to set such bonuses at a level that would provide
executive officers eligible to receive such bonuses with a strong incentive to
contribute to the success and profitability of the Company. During 1999, a
total of $498,125 was earned in bonuses to the Chief Executive Officer, the
Chief Financial Officer and the other three (3) most highly compensated
executive officers of the Company.
Executive Employment Contracts
The Company has entered into employment agreements with each of the named
officers below and on such terms and conditions as are described.
Eran Broshy. On June 14, 1999, Snyder Communications, Inc. retained the
services of Mr. Broshy as President of Snyder Communications, Inc.'s
healthcare group. Under the terms of Mr. Broshy's employment agreement, which
was assumed by the Company in connection with the spin-off from Snyder
Communications, Inc., he initially received 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, the Company granted to Mr. Broshy 503,938
non-qualified options to purchase Common Stock at an exercise price equal to
$7.9375, the closing price of Company Common Stock on the date of the spin-
off. 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 the Company on the
applicable vesting date of the spin-off. Mr. Broshy's employment agreement
also provides for a grant of an aggregate of $2,500,000 in restricted Common
Stock, 20% of which vested on the distribution date and the remaining 80%
vesting in equal increments over the next four years, provided he is still
employed by the Company on the applicable vesting date. The restricted stock
grant provided for in his employment agreement will prohibit Mr. Broshy from
transferring any of his Common Stock for a period of four years after the
distribution date. The agreement provides that upon a "change in control" of
the Company, 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 the
Company or the consummation of a merger or consolidation of the Company which
results in the Company's 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 the Company exclusively for the purchase of Common Stock.
Gregory S. Patrick. In September 1999, the Company retained the services of
Mr. Patrick as Chief Financial Officer. Under the terms of Mr. Patrick's
employment agreement, he initially received 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. Under his employment agreement, the
Company granted to Mr. Patrick non-qualified options to purchase an aggregate
of 251,969 shares of Common Stock at an exercise price equal to $7.9375, the
closing price of Common Stock on the distribution date. Mr. Patrick's options
vest at the rate of 25% per year on each anniversary of the grant date,
provided he is still employed by the Company on the applicable vesting date.
Mr. Patrick's employment agreement also provided for a grant of an aggregate
of $1,000,000 shares in restricted Common Stock, 40% of which vested on the
distribution date, with the remaining 60% vesting in equal increments over the
next four years, provided he is still employed by the Company on the
applicable vesting date. The restricted stock grant provided for in his
employment agreement will prohibit Mr. Patrick from transferring any of his
Common Stock for a
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period of four years after the distribution date. Furthermore, Mr. Patrick's
employment agreement provides that he may borrow from the Company an amount
necessary to pay any federal and state income taxes resulting from the
restricted stock grant.
Robert Brown, Ph.D. Health Products Research, Inc., a subsidiary of the
Company, 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 was assumed by the Company in
connection with the spin-off. Under the terms of his employment agreement, Dr.
Brown was granted 100,000 options to purchase shares of Snyder Communications
common stock. The options to purchase such Snyder Communications shares expired
in accordance with their terms. The Company granted him options to purchase
50,000 shares of Common Stock at an exercise price of $7.9375 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.
William C. Pollock. Healthcare Promotions, LLC, a subsidiary of the Company,
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 was assumed by the Company in connection with
the spin-off. Under the terms of his employment agreement, Mr. Pollock was
granted 75,000 options to purchase shares of Snyder Communications common
stock. The options to purchase such Snyder Communications shares expired in
accordance with their terms. The Company granted him options to purchase 50,000
shares of Common Stock at an exercise price of $7.9375 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.
Leonard Vicciardo. Health Products Research, Inc., a subsidiary of the
Company, entered into an employment agreement with Leonard Vicciardo on October
26, 1998. Mr. Vicciardo's initial base salary under his employment agreement is
$250,000. Mr. Vicciardo's employment agreement was assumed by the Company in
connection with the spin-off. Under the terms of his employment agreement, Mr.
Vicciardo was granted 90,000 options to purchase shares of Snyder
Communications common stock. The options to purchase such Snyder Communications
shares expired in accordance with their terms. The Company granted him options
to purchase 75,000 shares of Common Stock at an exercise price of $7.9375 per
share, vesting over a four-year period. In the event of Mr. Vicciardo's
termination without cause, voluntary termination for good reason," or his
termination pursuant to sale or transfer of Health Products Research, Inc., Mr.
Vicciardo 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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999, the Board of Directors was responsible for the establishment of
the general compensation policies of the Company. Throughout 1999, Eran Broshy,
the Chief Executive Officer of the Company, also served as a director of the
Company. Mr. Broshy absented himself from all discussions relating to, and
abstained from voting on, resolutions concerning his own compensation.
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On September 30, 1999, under a Secured Nonrecourse Promissory Note (the
"Note"), the Company loaned Eran Broshy $500,000 for the purpose of acquiring
shares of common stock of the Company. Mr. Broshy, in October 1999, purchased
45,000 shares of common stock of the Company (the "Pledged Shares"). Pursuant
to the terms of the Note, Mr. Broshy may prepay on the loan at any time, or
from time to time, but he must pay the $500,000, plus interest computed at the
rate of 6% per annum, in full, on or before September 30, 2003. In connection
with the Note, Mr. Broshy and the Company executed a Pledge and Security
Agreement, whereby the Company received a first priority security interest in
the Pledged Shares, the certificates representing the Pledged Shares, and all
dividends, distributions, cash, instruments and other property or proceeds that
may be received or distributed in respect of or in exchange for any or all of
the Pledged Shares.
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STOCKHOLDER RETURN PERFORMANCE GRAPH
SEC rules require proxy statements to contain a performance graph comparing
the performance of the Company's Common Stock against a broad market index and
against either a published industry or line-of-business index or a group of
peer issuers. The following graph compares the cumulative total return on a
$100 investment in the Company's Common Stock against the cumulative total
return on a similar investment in (i) the Total Return Index for The Nasdaq
Stock Market (US) and (ii) Nasdaq Health Services Stocks. The graph assumes
that all investments were made on September 23, 1999 (the date Ventiv's common
stock began trading on a "when issued" basis) and are held through the year
ended December 31, 1999 and that all dividends are reinvested on a daily basis.
Ventiv The Nasdaq Nasdaq Health
Health, Inc. Stock Market (US) Service Stocks
9/23/99 $100 $100 $100
9/30/99 $109.72 $ 99.84 $ 99.02
10/15/99 $ 88.89 $ 98.80 $ 88.89
10/29/99 $ 79.16 $107.10 $ 84.54
11/15/99 $ 59.72 $115.11 $ 91.44
11/30/99 $ 88.20 $118.52 $ 89.49
12/15/99 $102.09 $128.57 $ 89.21
12/31/99 $102.09 $144.09 $ 98.82
Returns for the Company's Common Stock depicted in the graph are not
necessarily indicative of future performance.
The above graph shall not have been deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than
ten percent (10%) of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission and the Nasdaq National Market System. In addition, under
Section 16(a), trusts for which a reporting person is a trustee and a
beneficiary (or for which a member of his immediate family is a beneficiary)
may have a separate reporting obligation with regard to ownership of the
Common Stock and other equity securities of the Company. Such reporting
persons are required by rules of the Securities and Exchange Commission to
furnish the Company with copies of all Section 16(a) reports they file. Based
solely upon a review of the copies of such forms furnished to the Company and
written representations from the Company's executive officers, directors and
greater than ten percent (10%) beneficial stockholders, the Company believes
that during the year ended December 31, 1999, all persons subject to the
reporting requirements of Section 16(a) filed the required reports on a timely
basis, except that a Form 4 was not timely filed for each of Daniel M. Snyder
and Michele D. Snyder. Mr. Snyder and Ms. Snyder subsequently filed Form 4s to
report the transactions.
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PROPOSAL FOR STOCK INCENTIVE PLAN
As part of the separation of the Company from Snyder Communications on
September 27, 1999, the Compensation Committee of the Board of Directors and
the entire Board of Directors of the Company approved and adopted the Stock
Incentive Plan as a way to promote the long-term growth of the Company by
rewarding key management employees, consultants and directors of the Company
with a proprietary interest in the Company and also to attract, motivate and
retain highly qualified and capable personnel. The Stock Incentive Plan was
effective on September 27, 1999, at the effective time of the spin-off of the
Company from Snyder Communications, Inc. In addition to being approved by the
Compensation Committee of the Board of Directors and the entire Board of
Directors of the Company, the Stock Incentive Plan was also approved by Snyder
Communications, Inc., the sole stockholder of the Company, prior to the
completion of the spin-off on September 27, 1999.
The Stock Incentive Plan is administered by the Compensation Committee. The
participants in the Stock Incentive Plan are the officers, key employees,
directors and consultants of the Company, as the Compensation Committee shall
determine.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE
COMPANY VOTE "FOR" APPROVAL OF THE STOCK INCENTIVE PLAN.
Summary of the Stock Incentive Plan
Awards to a participant under the Stock Incentive 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 Stock Incentive Plan. 4,800,000 shares of Ventiv
common stock are available under the Stock Incentive Plan, with that amount
subject to increase by 17.5% of the number of shares of Ventiv common stock
authorized for issuance by the Company's Board of Directors.
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.
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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 1,000,000 shares.
Administration. The Compensation Committee will administer the Stock
Incentive Plan. The Compensation Committee may delegate its authority to make
grants of stock options and stock appreciation rights to person 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.
Option Vesting and Exercising. The Compensation Committee will determine the
vesting period and all other terms and conditions of each option, except that
no option my 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, Ventiv common
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 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.
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 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.
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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 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
standard 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 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;
. 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);
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. market price per share; and
. total return to stockholders.
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 of service (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 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
Compensation Committee.
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
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 the Company merges or consolidates with another corporation, liquidates
or disposes of all or substantially all of its 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
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
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. 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 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 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 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.
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.
22
<PAGE>
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.
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 certain
23
<PAGE>
performance-based compensation that has, among other things, been approved by
stockholders in a separate vote. Certain awards under the plan may qualify for
the performance-based compensation exception to Section 162(m) of the Code.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE
COMPANY VOTE "FOR" APPROVAL OF THE STOCK INCENTIVE PLAN.
APPOINTMENT OF INDEPENDENT AUDITORS
Arthur Andersen LLP has served as independent auditors of the Company since
its separation from Snyder Communications, Inc. and has been recommended by
the Audit Committee to audit the accounts of the Company and its subsidiaries
for the year ending December 31, 2000.
The Company has been advised that representatives of Arthur Anderson LLP
will attend the Meeting, will have an opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE
COMPANY VOTE "FOR" APPROVAL OF THE APPOINTMENT OF INDEPENDENT AUDITORS.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
If a stockholder of the Company wishes to present a proposal for
consideration for inclusion in the Proxy statement for the 2001 Annual
Meeting, the proposal must be sent by certified mail-return receipt requested
and must be received at the executive offices of the Company, 1114 Avenue of
the Americas, New York, New York 10036, no later than December 31, 2000. All
proposals must conform to the rules and regulations of the Securities and
Exchange Commission (the "SEC"). The SEC recently amended Rule 14a-4, which
governs the use by the Company of discretionary voting authority with respect
to other stockholder proposals. SEC Rule 14a-4(c)(1) provides that, if the
proponent of a stockholder proposal fails to notify the Company at least
forty-five (45) days prior to the month and day of mailing of the prior year's
proxy statement, the proxies of the Company's management would be permitted to
use their discretionary authority at the Company's next annual meeting of
stockholders if the proposal were raised at the meeting without any discussion
of the matter in the proxy statement. For purposes of the Company's 2001
Annual Meeting of Stockholders, the deadline is March 16, 2001.
By Order of the Board of
Directors,
Gregory S. Patrick
Secretary
24
<PAGE>
PROXY
VENTIV HEALTH, INC.
1114 Avenue of the Americas
New York, New York 10036
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Eran Broshy and Gregory S. Patrick as proxies,
each with the power to appoint his or her substitute, and hereby authorizes them
to represent to vote as designated on the reverse side of this card, all of the
shares of Common Stock of Ventiv Health, Inc. held of record by the undersigned
on April 3, 2000 at the 2000 Annual Meeting of Stockholders to be held on May
31, 2000 or any adjournment or postponement thereof.
[TO BE SIGNED ON REVERSE SIDE.]
<PAGE>
[Back]
PLEASE RETAIN THIS ADMISSION TICKET
for the
Annual Meeting of Stockholders
of
VENTIV HEALTH, INC.
MAY 31, 2000
3:00 P.M., LOCAL TIME
______
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THIS ANNUAL MEETING, WHETHER
OR NOT YOU ATTEND THE ANNUAL MEETING IN PERSON. TO MAKE SURE YOUR SHARES ARE
REPRESENTED, WE URGE YOU TO COMPLETE AND MAIL THE PROXY CARD BELOW.
IF YOU PLAN TO ATTEND THE 2000 ANNUAL MEETING OF STOCKHOLDERS, PLEASE MARK THE
APPROPRIATE BOX ON THE PROXY CARD BELOW.
PRESENT THIS TICKET TO THE VENTIV HEALTH, INC. REPRESENTATIVE AT THE ENTRANCE TO
THE MEETING ROOM.
Please mark your votes as in this example.
1. ELECTION OF DIRECTORS
FOR all nominees listed below
WITHHOLD AUTHORITY to vote all nominees listed below
Nominees: Daniel M. Snyder
Michele D. Snyder
Eran Broshy
Mortimer B. Zuckerman
Fred Drasner
A. Clayton Perfall
Donald Conklin
John R. Harris
INSTRUCTION: To withhold authority to vote for any individual nominee strike a
line through the nominee's name in the list at right.
2. APPROVAL OF STOCK INCENTIVE PLAN
FOR
AGAINST
ABSTAIN
3. RATIFICATION OF APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT AUDITORS
FOR
AGAINST
ABSTAIN
4. In their discretion, the proxies are authorized to vote on such other
business as may properly come before the 2000 Annual Meeting.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this proxy will be
voted FOR proposals 1, 2 and 3 and in the discretion of the proxies on such
other business as may properly come before the 2000 Annual Meeting.
Please mark, sign, date and return the proxy card promptly using the enclosed
envelope.
Do you plan to attend the 2000 Annual Meeting?
Yes No
- -----------------------------------
(Signature)
- -----------------------------------
(Signature, if held jointly)
Dated: _______________, 2000
NOTE: Please sign exactly as name appears above. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
