Ventiv Health, Inc. 2004 10K Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the fiscal year ended December 31, 2004

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934 For the transition period from _____________to _____________

Commission file number: 0-30318

VENTIV HEALTH, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware

(State or Other Jurisdiction No. of Incorporation or Organization)

52-2181734

(I.R.S. Employer Identification No.)

200 Cottontail Lane Vantage Court North; Somerset, New Jersey 08873

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (800) 416-0555

Securities registered pursuant to Section 12(g) of the Act:

Securities registered pursuant to Section 12(g) of the Act: Common Stock

(Title of Class)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statement incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes [X] No [ ]

Based on the closing sale price on the Nasdaq National Market as of the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting stock held by nonaffiliates of the registrant was approximately $287,600,993. For the purposes of this calculation, shares owned by officers, directors and 10% shareholders known to the registrant have been deemed to be owned by affiliates. This determination of affiliate status is not a determination for other purposes.

As of February 28, 2005, there were 26,129,138 outstanding shares of the registrant's common stock.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the Registrant's Definitive Proxy Statement to be filed with the Commission for use in connection with the 2005 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.

TABLE OF CONTENTS

Item	Description	Page
PART I
1	Business	2
2	Properties	9
3	Legal Proceedings	9
4	Submission of Matters to a Vote of Securities Holders	9

PART II
5	Market for the Registrant’s Common Stock and Related Stockholder Matters	10
6	Selected Financial Data	11
7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
7A	Quantitative and Qualitative Disclosures About Market Risk	27
8	Financial Statements and Supplementary Data	28
9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	52
9A	Controls and Procedures	52
9B	Other Information	52

PART III
10	Directors and Executive Officers of the Registrant	53
11	Executive Compensation	53
12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	53
13	Certain Relationships and Related Transactions	53
14	Principal Accounting Fees and Services	53

PART IV
15	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	54

CAUTIONARY STATEMENT

All statements included or incorporated by reference in this Annual Report on Form 10-K (the “Report”), other than statements or characterizations of historical fact, are forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements concerning future revenues, operating expenses, capital requirements, growth rates, cash flows, operational performance, sources and uses of funds and acquisitions, our accounting estimates, assumptions and judgments, the competitive nature of and anticipated growth in our markets, the need for additional capital, changes in the pharmaceutical and life sciences industries, uncertainty related to the continued growth of outsourcing in those industries, changes in the competitive climate in which we operate, our ability to maintain large client contracts or enter into new contracts, uncertainties related to future incentive payments and earnings generated through revenue sharing arrangements and the emergence of future opportunities and other factors. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management’s beliefs, and certain assumptions made by us. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “potential,” “continue,” “assuming,” similar expressions and variations or negatives of these words. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors, some of which are listed under the section “Risks Related to Our Business” in Item 7 of this Report.

The forward-looking statements contained in this Report speak only as of the date hereof and are based upon information available to us at this time. Such information is subject to change, and we will not necessarily inform you of such changes. Except as required by applicable laws or regulations, we undertake no obligation to revise or update any forward-looking statements for any reason.

PART I

Item 1. Business.

Overview

Ventiv Health Inc. and subsidiaries (collectively “Ventiv”) is a diversified pharmaceutical services company spanning late-stage clinical through commercialization services, with leading market positions in outsourced sales teams, clinical staffing, compliance, patient assistance and analytical planning. We provide these services to the world's largest pharmaceutical organizations as well as to emerging and specialty pharmaceutical and life sciences organizations. Over almost three decades, our businesses have provided excellence in customized solutions and helped our clients achieve their business objectives.

We make available on our website, located at www.ventiv.com, the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the United States Securities and Exchange Commission (“SEC”): our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. All such filings are available free of charge. Information found on our website should not be considered part of this annual report on Form 10-K.

Services

We offer a broad range of integrated and stand alone services, in a context of consultative partnership that identifies strategic goals and applies targeted, tailored solutions. These programs include:

·	sales and marketing teams;

·	clinical staffing;

·	planning and analytics;

·	sample accountability and patient assistance;

·	marketing support services;

·	recruitment;

·	professional development and training;

·	data collection and management; and

·	clinical support;

Our organization and service offerings reflect the changing needs of our clients as their new products move through late-stage development and regulatory approval process and through commercialization. As a potential drug or device advances through the clinical trial process, a number of key professionals are needed within the clients’ clinical organization, including statisticians, data managers, statistical programmers and clinical research associates, to support the creation of the New Drug Applications (“NDA”). As the drug advances beyond clinical trials towards commercialization, our clients must plan and design a focused launch campaign to maximize product profitability upon regulatory approval of their product, decide upon the optimal promotional approach, and upon launch, support the product(s) with the appropriate product detailing and other promotional resources. In addition, there are a number of regulatory and compliance requirements that clients must adhere to. All along this lifecycle, Ventiv offers a range of services that support client needs, from late-stage clinical, through marketing and sales, and into compliance.

Ventiv's Business Units

We currently serve our clients primarily through three business units, which correspond to our reporting segments for 2004:

Ventiv Commercial Services, formerly known as Ventiv Pharma Services and previous to that as Ventiv Health Sales and Marketing, which includes our outsourced sales and marketing teams, compliance and patient assistance businesses, marketing support services, professional development and training, and recruitment of sales representatives in the commercial services area;

·	Ventiv Analytic Services, comprising Health Products Research ("HPR"), which provides planning and analytics services; and

Ventiv Clinical Services, which consists of the newly acquired businesses of Smith Hanley Associates, Smith Hanley Consulting Group and MedFocus (collectively “Smith Hanley”) and HHI Clinical & Statistical Research Services (“HHI”). This segment provides services related to recruitment, clinical staffing, and data collection and management.

Our clients may choose either to work with us across our full spectrum of services or narrowly focus their service needs within one of these units. Given the nature of the services provided by each business unit in relation to marketing needs throughout a product's life cycle, ample opportunities exist for cross-selling to current clients. Many of our larger clients utilize the services of all three units.

Our strategic goal is to provide the pharmaceutical and life sciences industries with value-added clinical, marketing, sales and compliance services that will enable our clients to achieve accelerated development and superior product sales through higher market penetration. Our business units possess significant combined experience, as each has developed and conducted successful clinical and/or commercialization programs for hundreds of individual pharmaceutical and life science products. Our expertise spans most therapeutic categories, including the significant markets of cardiology, anti-infectives, oncology, gastroenterology, respiratory, allergy, dermatology, and neurology. Our core competencies and track record of proven success enable us to establish strong relationships with our clients' senior personnel, which greatly contributes to client retention.

During 2004 we modified our segment reporting to take into account the integration of operations from our acquisition transactions. Ventiv Commercial Services, formerly known as Ventiv Pharma Services and prior to that as Ventiv Health Sales and Marketing, includes the compliance and patient assistance operations we acquired during 2004 in the Franklin transaction described below. Ventiv Analytic Services continues to comprise HPR’s planning and analytics services business. Ventiv Clinical Services includes our newly acquired Smith Hanley and HHI businesses. See Part II - Item 8 - Notes to Consolidated Financial Statements - Note 18 Segment Information , for a further description.

The following is a detailed description of our individual business units:

Ventiv Commercial Services

Ventiv Commercial Services encompasses three offerings:

Ventiv Pharma Teams

The Ventiv Pharma Teams group within Ventiv Commercial Services is organized to plan, implement and execute outsourced product commercialization programs for prescription pharmaceutical and other life sciences products. Ventiv Commercial Services maintains and operates systems, facilities, and support services necessary to recruit, train and deploy a customized, full-service, targeted sales force. Currently, Ventiv Pharma Teams operates one of the largest pharmaceutical outsourced sales organizations in the U.S., with approximately 2,500 sales representatives as of December 31, 2004.

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 Food and Drug Administration (“FDA”) approved indications. Information provided by the sales representative includes the product's role in treatment, efficacy, potential side-effects, dosage, danger of contra-indications with other drugs, cost and any other appropriate information. In addition to 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. In order to engage in an effective dialogue, the salesperson must be well educated and highly trained. Recruiting qualified personnel and providing client and product specific training are both core competencies of Ventiv Commercial Services.

Providing clients with high 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 high quality of representation for our clients. Ventiv Commercial Services’ recruiters maintain a fully automated database of qualified candidates for immediate hiring opportunities, and our website home page offers an online application for employment. We offer these recruitment services to clients as part of an integrated sales force recruitment, training and management program, or on a stand alone basis. Ventiv Pharma Teams hires a mix of full-time and flex-time representatives in order to accommodate the detailing level required by clients and maximize cost efficiency.

VENTIV HEALTH, INC.

1999 STOCK INCENTIVE PLAN

(As amended June 16, 2004)

1. Purposes.

The purposes of the Ventiv Health, Inc. 1999 Stock Incentive Plan are to promote the long-term growth of Ventiv Health, Inc. and its subsidiaries by rewarding key management employees, consultants and directors of Ventiv Health, Inc. and its subsidiaries with a proprietary interest in Ventiv Health, 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, Restricted Units, a Stock Appreciation Right, or any combination of the foregoing.

2.2 “Board” means the Board of Directors of the Corporation.

2.3 “Code” means the Internal Revenue Code of 1986, as amended, or any successor law.

2.4 “Commission” means the Securities and Exchange Commission or any successor agency.

2.5 “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).

2.6 “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.

2.7 “Corporation” means Ventiv Health, Inc., a Delaware corporation, or any successor thereto.

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

2.10 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

2.11 “Fair Market Value” means, on any given date, the current fair market value of shares as determined below:

(a) If the Shares are listed upon an established stock exchange or exchanges, “Fair Market Value” means the closing price of such Shares on the New York Stock Exchange, or if the Shares are not traded on the New York Stock Exchange, the exchange that trades the largest volume of Shares on the date of the Award.

(b) If the Shares are traded on the Nasdaq National Market, “Fair Market Value” means the closing price of such Shares reported on the Nasdaq National Market on the date of the Award, provided that if there should be no sales of such Shares reported on such date, the Fair Market Value of such Share on such date shall be deemed equal to the closing price as reported by the Nasdaq National Market for the last preceding date on which sales of such Shares were reported.

(c) In all other cases, “Fair Market Value” shall be determined by the 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.

2.12 “Option” means an option awarded under Section 7 to purchase Shares.

2.13 “Option Exercise Period” means the period from the Option Grant Date to the date on which an Option expires.

2.14 “Option Grant Date” means the date upon which the Compensation Committee grants an Option to an Optionee.

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

2.16 “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.

2.17 “Plan” means this Ventiv Health, Inc. 1999 Stock Incentive Plan, as it may be amended and restated from time to time.

2.18 “Restricted Period” means the period of time, which may be a single period or multiple periods, during which Restricted Stock or Restricted Units awarded to a Participant remains subject to the Restrictions imposed on such Shares or Restricted Units, as determined by the Compensation Committee.

2.19 “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.

2.20 “Restricted Stock Agreement” means a written agreement between a Participant and the Corporation evidencing an award of Restricted Stock.

2.21 “Restricted Stock Award Date” means the date on which the Compensation Committee awards Restricted Shares to the Participant.

2.22 “Restricted Units” means units awarded pursuant to Section 9 that entitle a Participant to receive, in the future, either a Share or the Fair Market Value thereof.

2.23 “Restricted Unit Agreement” means a written agreement between a Participant and the Corporation evidencing an award of Restricted Units.

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

2.25 “Shares” means shares of Ventiv Stock.

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 “Ventiv Stock” means shares of common stock, par value $0.001 per share, of the Corporation.

2.31 “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 Compensation Committee shall have full power and authority to:

(i) designate the Participants to whom Options, Restricted Stock, Restricted Units, 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, Restricted Unit 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 Compensation 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 Compensation 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.

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 an Option, Restricted Stock, Restricted Units, 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.

Subject to adjustment as provided in Section 16 hereof, 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 the Plan shall not exceed 7,200,000 shares of Ventiv Stock. Subject to adjustment as provided in Section 16 hereof, the aggregate number of Shares which may be issued upon the exercise of Options or Stock Appreciation Rights and the Awards of Restricted Stock or Restricted Units under this Plan to any one Participant during any calendar year shall not exceed 1,000,000 Shares of Ventiv 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 Ventiv Stock which may be issued upon the exercise of Options or Stock Appreciate Rights and the Award of Restricted Stock and Restricted Units but shall not apply for purposes of determining the aggregate number of Shares which may be issued upon the exercise of Options or Stock Appreciation Rights and the Award of Restricted Stock or Restricted Units 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 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 hereof, Options shall vest in accordance with the terms provided by the Compensation Committee in the Stock 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 Stock Option Agreement, an Option shall not be exercisable earlier than six (6) months after the Option Grant Date, and (ii) in no event shall the Option Exercise Period exceed ten (10) 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 (6) 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 (3) 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 (1) 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 (10) years after the Option Grant Date. Such provisions shall be contained in the Stock 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 16 hereof.

(f) Investment Purpose. The Corporation shall not be obligated to sell or issue any Shares pursuant to any Option unless the Shares with respect to which the Option is being exercised are at that time registered or exempt from registration under the Securities Act of 1933, as amended.

(g) Assumption of Options. The Corporation may issue or assume under the Plan any stock option previously granted by the Corporation or in connection with any transaction or transactions upon such terms and conditions and, in the case of any option so assumed, with such modifications or adjustments therein, as shall be determined by the 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 12 hereof to the contrary notwithstanding, if the Compensation Committee so provides in the Stock 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 Stock Appreciation Rights that relate 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;

(c) the Restrictions applicable to the Award, including, but not limited to, continuous employment with the Corporation or any of its Subsidiaries for a specified term or the attainment of specific corporate, divisional or individual performance standards or goals, which Restricted Period and Restrictions may differ with respect to each Participant;

(d) whether the Participant shall receive the dividends and other distributions paid with respect to an Award of Restricted Stock as declared and paid to the holders of the Shares during the Restricted Period or shall be withheld by the Corporation for the account of the Participant until the Restricted Periods have expired or the Restrictions have been satisfied, and whether interest shall be paid on such dividends and other distributions withheld, and if so, the rate of interest to be paid, or whether such dividends may be reinvested in Shares;

(e) the percentage of the Award which shall vest in the Participant in the event of such Participant’s death or Disability prior to the expiration of the Restricted Period or the satisfaction of the Restrictions applicable to an award of Restricted Stock.

8.2 Delivery of Shares. Upon an Award of Restricted Stock to a Participant, the stock certificate representing the Restricted Stock shall be issued and transferred to and in the name of the Participant, whereupon the Participant shall become a stockholder of the Corporation with respect to such Restricted Stock and shall be entitled to vote the Shares. Such stock certificate shall be held in custody by the Corporation, together with stock powers executed by the Participant in favor of the Corporation, until the Restricted Period expires and the Restrictions imposed on the Restricted Stock are satisfied.

9. Restricted Units.

9.1 Terms of Restricted Unit Awards. Subject to and consistent with the provisions of the Plan, with respect to each Award of Restricted Units to a Participant, the Compensation Committee shall determine:

(a) the terms and conditions of the Restricted Unit 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 Units as declared and paid to the holders of the Shares during the Restricted Period or whether such dividends 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 or other termination of employment prior to the expiration of the Restricted Period or the satisfaction of the Restrictions applicable to an award of Restricted Stock.

9.2 Payment with Respect to Restricted Units. On the date that the Restricted Period expires and the Restrictions imposed on any Restricted Units are satisfied (the “Vesting Date”), a Participant shall be entitled to receive, at the option of the Corporation, with respect to each such Restricted Unit, either (i) a Share or (ii) a cash payment equal to the Fair Market Value of a Share on such date. Notwithstanding the preceding sentence, a Participant shall be entitled to elect, no later than one year prior to the Vesting Date, to defer delivery of the Shares or cash that would otherwise be payable on the Vesting Date until a date at least one year after the Vesting Date (the “Deferral Date”). If such election shall be made in accordance with procedures established by the Committee, the Participant shall receive on the Deferral Date for each such Restricted Unit (x) either a Share or a cash payment equal to the Fair Market Value of a Share on the Deferral Date, and (y) a payment in cash or Shares equal to the amount of any dividends payable with respect to a Share during the period from the Vesting Date through the Deferral Date, as set forth in such Participant’s Restricted Unit Agreement.

Unless otherwise provided in a Participant’s Restricted Unit Agreement, if a Participant ceases to be an employee, Director or Consultant of the Company and its Subsidiaries for any reason other than misconduct specified in Section 7.1(h), at any time on or after the Vesting Date but prior to the Deferral Date, such Participant shall receive payment in respect of such Participant’s Restricted Units on such accelerated basis as shall be determined by the Committee.

10. Performance-Based Awards of Restricted Stock or Restricted Units.

Certain Awards of Restricted Stock granted under the Plan may be granted in a manner that the Awards qualify for the performance-base 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 or Restricted Units granted or the number of Shares or Restricted Units vested upon the attainment of such performance goal.

11. Stock Appreciation Rights.

11.1 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 (6) 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.

11.2 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 11.2(b), the Fair Market Value of the Shares shall be determined as of the date of exercise of the SAR.

(c) An SAR may be exercised without exercising the Related Option, but the Related Option shall be canceled for all purposes under the Plan to the extent of the SAR exercise. A Related Option may be exercised without exercising the SAR, but the SAR shall be canceled for all purposes under the Plan to the extent of the Related Option Exercise.

12. Non-Transferability of Awards.

Except as may be provided by the Committee in accordance with Section 7.1(j)hereof, 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(j) hereof, 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.

13. 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.

14. 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.

15. Amendment and Termination of Plan.

The Board may amend the Plan from time to time. The Corporation shall obtain shareholder approval of any Plan amendment to the extent necessary or desirable to comply with applicable laws, regulations and rules of self-regulatory organizations. Unless sooner terminated as provided herein, the Plan shall terminate on the tenth anniversary of its original 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.

16. Changes in Capitalization.

Subject to any required action by the stockholders, the number of Shares covered by each outstanding Award and the exercise price per each such Share subject to an Option or Stock Appreciation Right shall be proportionately adjusted for any increase or decrease in the number of issued Shares of the Corporation resulting from a subdivision or consolidation of Shares or the payment of a stock dividend (but only on the Shares) or any other increase or decrease in the number of such Shares effected without receipt of consideration by the Corporation.

If the Corporation merges or is consolidated with another corporation, whether or not the Corporation is a surviving corporation, or if the Corporation is liquidated or sells or otherwise disposes of substantially all of its assets while unexercised Options remain outstanding under the Plan, (i) after the effective date of the merger, consolidation, liquidation, sale or other disposition, as the case may be, each holder of an outstanding Option shall be entitled, upon exercise of that Option, to receive, in lieu of Shares, the number and class or classes of shares of stock or other securities or property to which the holder would have been entitled if, immediately prior to the merger, consolidation, liquidation, sale or other disposition, the holder had been the holder of record of a number of Shares equal to the number of Shares as to which that Option may be exercised; or (ii) if Options have not already become exercisable, the 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 16, 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.

17. Governing Law.

The Plan and each Stock Option Agreement, Restricted Stock Agreement, Restricted Unit Agreement and Stock Appreciation Rights Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware.

18. Effective Date of Amended Plan.

The 2004 amendment to the Plan shall be subject to approval by the shareholders of the Corporation at the Corporation’s 2004 Annual Meeting of Stockholders. In the event such stockholder approval is not received, the Plan as originally enacted shall remain in full force and effect.

	High		Low
Year ended December 31, 2004
First Quarter	$	13.92	$	9.36
Second Quarter	$	18.40	$	13.87
Third Quarter	$	16.95	$	12.94
Fourth Quarter	$	20.67	$	16.65

		High		Low
Year ended December 31, 2003
First Quarter	$	2.74	$	1.72
Second Quarter	$	4.25	$	2.55
Third Quarter	$	7.55	$	4.15
Fourth Quarter	$	9.31	$	7.10

	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by security holders

1999 Stock Incentive Plan	4,207,524	$8.39	1,252,883	*

Equity compensation plans not approved by security holders ………………………………	-	-	-

Total…………………………………………	4,207,524		1,252,883

* The 1999 Stock Incentive Plan authorizes the issuance of stock options, restricted stock, restricted stock units and stock appreciation rights. To date we have not issued any restricted stock units or stock appreciation rights.

	For the Years Ended December 31,
	2004		2003		2002		2001		2000
	(in thousands, except per share data)
Revenues	$352,184		$224,453		$215,387		$294,763		$274,686
Earnings (losses) from continuing operations	$30,130		$9,895		$4,941		$(16,060)		$24,715
Earnings (losses) from discontinued operations	$1,002		$(4,119)		$2,951		$(42,442)		$(7,901)
Net earnings (losses)	$31,132		$5,776		$7,892		$(58,502)		$16,814

Basic earnings (losses) per share:
Continuing operations	$1.26		$0.43		$0.22		$(0.71)		$1.09
Discontinued operations	$0.04		$(0.18)		$0.13		$(1.87)		$(0.35)
Net earnings (losses)	$1.30		$0.25		$0.35		$(2.58)		$0.74

Diluted earnings (losses) per share:
Continuing operations	$1.18		$0.42		$0.22		$(0.71)		$1.06
Discontinued operations	$0.04		$(0.18)		$0.13		$(1.87)		$(0.34)
Net earnings (losses)	$1.22		$0.24		$0.35		$(2.58)		$0.72

Shares used in computing basic earnings (losses) per share	23,951		22,919		22,842		22,648		22,628

Shares used in computing diluted earnings (losses) per share	25,437		23,801		22,857		22,648		23,406

Balance sheet data:
Total assets	$	287,452	$	180,708	$	153,418	$	232,343	$	249,491

Long-term debt (a)	$	24,898	$	18,488	$	8,904	$	16,947	$	31,857

Total equity	$	172,444	$	107,725	$	96,446	$	87,206	$	145,311

Operation	Consideration at Closing	Additional Consideration
Alpharetta, Georgia-based business unit	$0.9 million in cash	Up to $0.5 million in contingent payments based on results of divested unit (all received as of December 31, 2004)
Ventiv Health Germany	EUR 6.2 million ($6.1 million) in cash	Up to EUR 5.0 million payable from future earnings of the business ($1.8 million received through December 31, 2004)
Hungary-based contract sales business	$0.3 million in cash	Up to $0.3 million (all received through December 31, 2004)

	For the Years Ended December 31,
	2004					2003					2002
(in thousands, except for per share data)
Revenues:				Percentage*					Percentage*					Percentage *
Ventiv Commercial Services	$	300,170		85.2	%	$	194,547		86.7	%	$	188,978		87.7	%
Ventiv Analytic Services		30,326		8.6	%		29,906		13.3	%		25,677		11.9	%
Ventiv Clinical Services		21,688		6.2	%		--		--			--		--
Other		--		--			--		--			732		0.4	%
Total revenues		352,184		100.0	%	$	224,453		100.0	%	$	215,387		100.0	%

Cost of services:
Ventiv Commercial Services		247,957		82.6	%		164,172		84.4	%	$	161,703		85.6	%
Ventiv Analytic Services		17,289		57.0	%		18,486		61.8	%		16,497		64.2	%
Ventiv Clinical Services		14,487		66.8	%		--		--			--		--
Other		--		--			--		--			701		95.8	%
Total cost of services		279,733		79.4	%		182,658		81.4	%		178,901		83.1	%

Selling, general and administrative expenses		38,539		10.9	%		26,223		11.7	%		27,397		12.7	%

Other operating income		264		--			392		0.2	%		--		--

Total operating earnings	$	34,176		9.7	%	$	15,964		7.1	%	$	9,089		4.2	%
Interest expense		(922	)	(0.3	)%		(549	)	(0.3	)%		(1,576	)	(0.7	)%
Interest income		678		0.2	%		413		0.2	%		456		0.2	%
Earnings from continuing operations before income taxes		33,932		9.6	%		15,828		7.0	%		7,969		3.7	%
Income tax provision		(3,802	)	(1.1	)%		(5,933	)	(2.6	)%		(3,028	)	(1.4	)%
Earnings from continuing operations		30,130		8.5	%		9,895		4.4	%		4,941		2.3	%

Earnings (losses) from discontinued operations:
Losses from discontinued operations, net of taxes		--		--			(4,092	)	(1.8	)%		(4,772	)	(2.2	)%
Gains (losses) on disposals of discontinued operations, net of taxes		1,002		0.3	%		(4,406	)	(2.0	)%		2,323		1.1	%
Tax benefit arising from the disposal of a discontinued operation		--		0.0	%		4,379		2.0	%		5,400		2.5	%
Earnings (losses) from discontinued operations		1,002		0.3	%		(4,119	)	(1.8	)%		2,951		1.4	%

Net earnings	$	31,132		8.8	%	$	5,776		2.6	%	$	7,892		3.7	%

Earnings (losses) per share:
Continuing operations:
Basic	$	1.26				$	0.43				$	0.22
Diluted	$	1.18				$	0.42				$	0.22
Discontinued operations:
Basic	$	0.04				$	(0.18	)			$	0.13
Diluted	$	0.04				$	(0.18	)			$	0.13
Net earnings:
Basic	$	1.30				$	0.25				$	0.35
Diluted	$	1.22				$	0.24				$	0.35

(Amounts in thousands)		Amounts Due In
Contractual Obligations	Total Obligation	Less than 1 Year	1 - 3 years	3 -5 years	More than 5 years
Capital lease obligations (a)	$39,343	$13,066	$22,548	$3,729	$---
Operating leases	28,247	6,927	12,840	5,700	2,780
Total obligations	$67,590	$19,993	$35,388	$9,429	$2,780

	Page
Report of Management……………………………………………………………………………………….…………..	29
Independent Registered Public Accounting Firm Report…………………………………………….…………………..	30
Consolidated Balance Sheets as of December 31, 2004 and 2003……………………………………………………….	31
Consolidated Statements of Operations for the years ended December 31, 2004, 2003 and 2002………………………	32
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2004, 2003, and 2002…………...	33
Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002……………………..	34
Notes to Consolidated Financial Statements……………………………………………………………………………..	35

	December 31,
	2004			2003
ASSETS
Current assets:
Cash and equivalents	$50,809			$54,970
Restricted cash	2,488			1,672
Accounts receivable, net of allowances for doubtful accounts of $1,980 and $2,019 at
December 31, 2004 and 2003, respectively		56,534			41,836
Unbilled services		36,130			21,347
Prepaid expenses and other current assets		2,755			1,146
Current deferred tax assets		8,226			1,660
Total current assets		156,942			122,631

Property and equipment, net		40,226			31,457
Goodwill		64,823			20,638
Other intangibles, net		21,370			85
Deferred tax assets		3,583			5,438
Deposits and other assets		508			459
Total assets	$	287,452		$	180,708

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Current portion of capital lease obligations	$	12,004		$	8,100
Accrued payroll, accounts payable and accrued expenses		56,076			32,105
Current income tax liabilities		12,113			9,165
Client advances and unearned revenue.		9,184			4,859
Total current liabilities		89,377			54,229

Capital lease obligations		24,898			18,488
Other non-current liabilities		733			266
Total liabilities		115,008			72,983

Commitments and contingencies

Stockholders’ Equity:
Preferred stock, $.001 par value, 10,000,000 shares authorized, none issued and outstanding at
December 31, 2004 and 2003, respectively		--			--
Common stock, $.001 par value, 50,000,000 shares authorized; 25,705,012 and 23,094,503
Shares issued and outstanding at December 31, 2004 and 2003, respectively		26			23
Additional paid-in-capital		193,061			159,359
Deferred compensation		(420	)		(85	)
Accumulated other comprehensive earnings		320			103
Accumulated deficit		(20,543	)		(51,675	)
Total stockholders’ equity		172,444			107,725

Total liabilities and stockholders’ equity	$	287,452		$	180,708

	For the Years Ended December 31,
		2004			2003			2002
Revenues	$	352,184		$	224,453		$	215,387
Operating expenses:
Cost of services		279,733			182,658			178,901
Selling, general and administrative expenses		38,539			26,223			27,397
Restructuring		(264	)		--			--
Gain on sale of real estate		--			(392	)		--
Total operating expenses		318,008			208,489			206,298
Operating earnings		34,176			15,964			9,089
Interest expense		(922	)		(549	)		(1,576	)
Interest income		678			413			456
Earnings from continuing operations before income taxes		33,932			15,828			7,969
Income tax provision		(3,802	)		(5,933	)		(3,028	)
Earnings from continuing operations		30,130			9,895			4,941

Earnings (losses) from discontinued operations:
Losses from discontinued operations, net of tax expense of $--, $63 and $159 for the years ended December 31 2004, 2003 and 2002, respectively		--			(4,092	)		(4,772	)
Gains (losses) on disposals of discontinued operations, net of tax (expense)benefit of ($547), $2,056 and $2,585 for the years ended December 31 2004, 2003 and 2002, respectively		1,002			(4,406	)		2,323
Tax benefit related to the disposal of a discontinued operation		--			4,379			5,400
Earnings (losses) from discontinued operations		1,002			(4,119	)		2,951

Net earnings	$	31,132		$	5,776		$	7,892

Earnings (losses) per share:
Continuing operations:
Basic	$	1.26		$	0.43		$	0.22
Diluted	$	1.18		$	0.42		$	0.22
Discontinued operations:
Basic	$	0.04		$	(0.18	)	$	0.13
Diluted	$	0.04		$	(0.18	)	$	0.13
Net earnings:
Basic	$	1.30		$	0.25		$	0.35
Diluted	$	1.22		$	0.24		$	0.35
Weighted average common shares outstanding:
Basic		23,951			22,919			22,842
Diluted		25,437			23,801			22,857

	Common Stock		Additional Paid-In Capital			Accumulated Deficit			Deferred Compen- Sation			Compre-hensive Income (Loses)			Accumulated Other Comprehen-sive Earnings (Losses)			Total
Balance at January 1, 2002	$23		$157,864			$(65,343)			$(1,275)						$(4,063)			$87,206
Net earnings	--		--			7,892			--			$7,892			--			7,892
Foreign currency translation Adjustments	--		--			--			--			4,712			4,712			4,712
Write-off of currency translation adjustments from divestitures												(4,937)			(4,937)			(4,937)
Taxes payable from vesting of restricted stock				(166	)														(166	)
												$	7,667
Cancellation of restricted shares		--		(300	)		--			300						--			--
Vesting of restricted shares		--		--			--			518						--			518
Issuance of stock options to employees		--		12			--			--						--			12
Write-off of officer loan to purchase common stocks		--		500			--			--						--			500
Other		--		709			--			--						--			709
Balance at December 31, 2002		23		158,619			(57,451	)		(457	)					(4,288	)		96,446
Net earnings		--		--			5,776			--		$	5,776			--			5,776
Foreign currency translation Adjustment		--		--			--			--			(1,913	)		(1,913	)		(1,913	)
Write-off of currency translation adjustments from divestitures		--		--			--			--			6,304			6,304			6,304
												$	10,167
Vesting of restricted shares		--		--			--			397						--			397
Exercise of stock options		--		555			--			--						--			555
Issuance of restricted shares		--		85			--			(85	)					--			--
Tax benefit from exercise of employee stock options and vesting of restricted stock		--		345			--			--						--			345

Executive share surrender		--		(185	)		--			--						--			(185	)
Other		--		(60	)		--			60						--			--
Balance at December 31, 2003		23		159,359			(51,675	)		(85	)					103			107,725
Net earnings		--		--			31,132			--		$	31,132			--			31,132
Foreign currency translation Adjustment		--		--			--			--			217			217			217
												$	31,349
Vesting of restricted shares		--		--			--			64						--			64
Compensation expense		--		74			--			--						--			74
Exercise of stock options		2		3,196			--			--						--			3,198
Issuance of restricted shares		--		399			--			(399	)					--			--
Tax benefit from exercise of employee stock options and vesting of restricted stock		--		4,493			--			--						--			4,493
Issuance of shares in connection with acquisitions		1		25,540			--			--						--			25,541
Balance at December 31, 2004	$	26	$	193,061		$	(20,543	)	$	(420	)				$	320		$	172,444

	For the Years Ended
	December 31,
	2004			2003			2002
Cash flows from operating activities:
Net earnings	$31,132			$5,776			$7,892
Adjustments to reconcile net earnings to net cash provided by operating activities:
(Earnings) losses from discontinued operations	(1,002)			4,119			(2,951)
Depreciation	15,602			9,485			9,585
Amortization	306			19			47
Deferred taxes		(4,711	)		2,316			1,750
Gain on sale of real estate		--			(392	)		--
Write off of deferred financing costs		--			--			314
Stock compensation expense		138			397			518
Tax benefit (expense) from stock option exercises and vesting of restricted shares		4,493			345			(166	)
Write-off of officer note receivable		--			--			500
Estimated future losses on contracts		--			--			(2,400	)
Executive share surrender.		--			(185	)		--
Changes in assets and liabilities, net of effects from discontinued operations:
Restricted cash.		184			810			(669	)
Accounts receivable, net		(1,186	)		(13,140	)		9,785
Unbilled services.		(9,522	)		(6,800	)		27,933
Prepaid expenses and other current assets		(1,208	)		280			447
Accrued payroll, accounts payable and accrued expenses		8,413			3,926			(4,343	)
Current income tax liabilities		2,948			5,886			(2,253	)
Client advances and unearned revenue		4,286			1,134			(12,704	)
Other		397			341			63
Net cash provided by operating activities		50,270			14,317			33,348

Cash flows from investing activities:
Acquisitions, net of cash acquired		(44,943	)		--			--
Proceeds from disposals of discontinued operations		2,141			1,280			17,870
Purchases of property and equipment		(5,697	)		(3,642	)		(3,966	)
Proceeds from manufacturers rebates on leased vehicles		3,799			1,478			111
Proceeds from sale of real estate		--			1,099			--
Net cash (used in) provided by investing activities		(44,700	)		215			14,015

Cash flows from financing activities:
Repayments on line of credit		--			--			(35,000	)
Repayments of capital lease obligations		(11,021	)		(6,354	)		(7,274	)
Fees to establish line of credit		--			--			(610	)
Collateralization of obligations under the letter of credit		(1,000	)		(788	)		--
Proceeds from exercise of stock options		3,198			555			--
Net cash used in financing activities		(8,823	)		(6,587	)		(42,884	)

Net cash (used in) provided by discontinued operations		(1,125	)		2,879			6,378
Effect of exchange rate changes		217			(1,913	)		(225	)

Net (decrease) increase in cash and equivalents		(4,161	)		8,911			10,632
Cash and equivalents, beginning of year		54,970			46,059			35,427
Cash and equivalents, end of year	$	50,809		$	54,970		$	46,059

Supplemental disclosures of cash flow information:
Cash paid for interest	$	857		$	352		$	1,312
Cash paid for income taxes	$	1,641		$	462		$	564
Supplemental disclosure of non-cash activities:
Vehicles acquired through capital lease agreements	$	16,581		$	19,463		$	7,099
Stock issuance related to acquisitions	$	25,541			--			--

	Year Ended December 31,
	2004		2003		2002
	(in thousands, except per share data)
Basic EPS from Continuing Operations Computation
Earnings from continuing operations	$30,130		$9,895		$4,941
Weighted average number of common shares outstanding		23,951		22,919		22,842
Basic EPS from continuing operations	$	1.26	$	0.43	$	0.22

Diluted EPS from Continuing Operations Computation
Earnings from continuing operations	$	30,130	$	9,895	$	4,941
Adjustments		--		--		--
Adjusted earnings from continuing operations	$	30,130	$	9,895	$	4,941

Weighted average number of common shares outstanding		23,951		22,919		22,842
Stock options ⁽¹⁾		1,482		882		15
Restricted awards		4		--		--
Total diluted common shares outstanding		25,437		23,801		22,857

Diluted EPS from continuing operations	$	1.18	$	0.42	$	0.22

Purchase price consideration	Franklin		Smith Hanley		HHI
Cash *	$7,705		$31,582		$5,431
Stock		3,580		21,215		746
Contingent consideration		1,672		6,832		--
Total	$	12,957	$	59,629	$	6,177

Allocation of purchase price	Franklin			Smith Hanley			HHI
Current assets	$3,165			$13,859			$1,005
Property and equipment, and other noncurrent assets	432			670			48
Goodwill		7,714			32,757			3,752
Identifiable intangible assets		2,557			17,400			1,610
Liabilities assumed		(911	)		(5,057	)		(238	)
Total	$	12,957		$	59,629			6,177

	As of December 31,
	2004			2003
	(in thousands)
Land	$---			$---
Buildings and leasehold improvements	2,973			1,978
Computer equipment and software		16,896			13,826
Vehicles		44,397			31,715
Furniture and fixtures		3,600			3,784
	$	67,866		$	51,303
Accumulated depreciation		(27,640	)		(19,846	)
	$	40,226		$	31,457

	December 31,
(in thousands)	2004		2003
Ventiv Commercial Services	$	28,314	$	20,638	(1	)
Ventiv Clinical Services		36,509		--	(1	)
Total	$	64,823	$	20,638

	December 31, 2004							December 31, 2003
(in thousands)			Accumulated							Accumulated
	Gross		Amortization			Net		Gross		Amortization			Net
Customer relationships ⁽¹⁾	$	7,567	$	(282	)	$	7,285	$	--	$	--		$	--
Noncompete agreement ⁽¹⁾		240		(5	)		235		--		--			--
Other ⁽²⁾		260		(170	)		90		236		(151	)		85
Total definite-life intangibles		8,067		(457	)		7,610		236		(151	)		85
Tradename ⁽¹⁾		13,760		--			13,760		--		--			--
Total other intangibles	$	21,827	$	(457	)	$	21,370	$	236	$	(151	)	$	85

Intangible asset	Amount (in thousands)		Weighted average amortization period
Tradename	$13,760		Indefinite
Customer relationships		7,567		7.8 years
Noncompete agreement		240		4.0 years
Total	$	21,567

Years Ending December 31,
2005	$	6,927
2006		6,770
2007		6,070
2008		4,100
2009		1,600
Thereafter		2,780
Total minimum lease payments	$	28,247

	U.S. Fleet Leases (a)
Years Ending December 31,
2005	$13,066
2006	12,285
2007	10,263
2008	3,728
2009	1
Total minimum lease payments	39,343
Amount representing interest and anagement fees	(2,441)
	36,902
Current portion	(12,004)
Non-current lease obligations	$24,898

	Number of Shares			Weighted Average Exercise Price Per Share
	(in thousands)
Outstanding options at January 1, 2002	3,316			$7.92
Granted	3,238			2.62
Exercised		--			--
Forfeited or expired		(2,662	)		8.04
Outstanding options at December 31, 2002		3,892		$	3.43
Granted		371			6.75
Exercised		(181	)		3.08
Forfeited or expired		(218	)		3.61
Outstanding options at December 31, 2003		3,864		$	3.76
Granted		1,467			16.51
Exercised		(1,059	)		3.02
Forfeited or expired		(64	)		3.63
Outstanding options at December 31, 2004		4,208		$	8.39
Exercisable at:
December 31, 2002		1,277		$	4.80

December 31, 2003		1,987		$	4.24

December 31, 2004		1,681		$	4.64

				Outstanding Options		Exercisable Options
Exercise Price Range			Numbers of Options	Weighted Average Exercise Price	Weighted Average Remaining Life (years)	Number of Options	Weighted Average Exercise Price
$1.19	To	$1.19	8	$1.19	7.77	--	$0.00
$1.48	To	$1.66	1,079	$1.66	7.94	501	$1.66
$1.68	To	$3.42	215	$2.42	7.32	41	$2.50
$4.00	To	$4.00	713	$4.00	7.92	597	$4.00
$4.11	To	$8.45	661	$8.08	6.20	478	$8.05
$8.81	To	$15.48	181	$11.77	8.15	60	$9.29
$15.96	To	$15.96	500	$15.96	7.33	--	$0.00
$16.86	To	$17.25	616	$17.05	9.78	4	$16.86
$17.57	To	$20.12	235	$17.87	9.62	--	$0.00
			4,208			1,681

	Restricted Stock
	Number of Shares
	(in thousands)
January 1, 2002	659
Granted	--
Cancelled	(33)
December 31, 2002 (559 shares vested)	626
Granted	10
Cancelled	--
December 31, 2003 (626 shares vested)		636
Granted		23
Cancelled		--
December 31, 2004 (631 shares vested)		659

	Beginning Balance		Additions		Deductions for Amounts Paid			Adjustments		Balance at End of Period
Year Ended December 31, 2004	$302		$--		$(38)			$(264)		$--
Year Ended December 31, 2003	$	534		--		(232	)		--	$	302
Year Ended December 31, 2002	$	1,064	$	--	$	(530	)	$	--	$	534

Deferred Compensation	7			328
Intangible Assets	4,001			4,328
Net operating loss carryforwards	20,048			30
Fixed Assets		11,777			9,513
Other		388			1,314
Subtotal		36,221			15,513
Gross Deferred Assets		46,720			22,749
Current Deferred Liabilities:
Accrued Expenses		(1,301	)		(4,449	)
Other		(972	)		(1,127	)
Subtotal		(2,273	)		(5,576	)

Non-Current Deferred Liabilities:
Property and Equipment		(12,606	)		(9,911	)
Other		(14	)		(164	)
Subtotal		(12,620	)		(10,075	)
Gross Deferred Liabilities		(14,893	)		(15,651	)

Valuation Allowance		(20,018	)		--

Net deferred tax assets	$	11,809		$	7,098

	Ventiv Commercial Services		Ventiv Analytic Services		Ventiv Clinical Services		Other			Total
Revenues*	$300,170		$30,326		$21,688		$--			$352,184
Depreciation and amortization	14,995		618		219		76			15,908
Restructuring	249		--		--		15			264
Interest expense		627		--		--		295			922
Interest income		34		17		5		622			678
Segment income (loss)	$	33,654	$	7,219	$	1,709	$	(8,650	)	$	33,932

	2004 Quarter Ended (b)
	March 31		June 30		Sept. 30		Dec. 31			Total (a)
	(in thousands, except per share amounts)
Revenues	$	70,661	$	75,221	$	88,853	$	117,449		$	352,184
Gross profit		14,350		14,924		16,831		26,346			72,451
Earnings from continuing operations		4,948		4,855		5,087		15,240			30,130
Earnings (losses) from discontinued operations		155		1,754		223		(1,130	)		1,002
Net earnings		5,103		6,609		5,310		14,110			31,132
Earnings (losses) per share (a)
Continuing operations:
Basic	$	0.22	$	0.21	$	0.21	$	0.60		$	1.26
Diluted	$	0.20	$	0.19	$	0.20	$	0.57		$	1.18
Discontinued operations:
Basic	$	--	$	0.07	$	0.01	$	(0.04	)	$	0.04
Diluted	$	0.01	$	0.07	$	0.01	$	(0.05	)	$	0.04
Net earnings:
Basic	$	0.22	$	0.28	$	0.22		0.56		$	1.30
Diluted	$	0.21	$	0.26	$	0.21		0.52		$	1.22

	2003 Quarter Ended (b)
	March 31			June 30			Sept. 30			Dec. 31		Total (a)
	(in thousands, except per share amounts)
Revenues	$43,654			$46,239			$59,291			$75,269		$224,453
Gross profit	5,798			8,255			11,323			16,419		41,795
Earnings from continuing operations	224			1,753			2,960			4,958		9,895
Earnings (losses) from discontinued operations	(1,396)			(3,585)			(6,078)			6,940		(4,119)
Net earnings (losses)	(1,172)			(1,832)			(3,118)			11,898		5,776
Earnings (losses) per share (a)
Continuing operations:
Basic	$	0.01		$	0.08		$	0.13		$	0.22	$	0.43
Diluted	$	0.01		$	0.07		$	0.12		$	0.20	$	0.42
Discontinued operations:
Basic	$	(0.06	)	$	(0.16	)	$	(0.27	)	$	0.30	$	(0.18	)
Diluted	$	(0.06	)	$	(0.15	)	$	(0.26	)	$	0.29	$	(0.18	)
Net earnings (losses):
Basic	$	(0.05	)	$	(0.08	)	$	(0.14	)	$	0.52	$	0.25
Diluted	$	(0.05	)	$	(0.08	)	$	(0.14	)	$	0.49	$	0.24

			Additions				Deductions
	Balance at Beginning Of Year		Charged to Cost and Expense		Charged to other Accounts ⁽¹⁾		from Reserve for Purpose for which Reserve was Created		Balance at End Of Year
Allowances for Doubtful Accounts:
Year ended December 31, 2004	$2,019		$643		$141		$823		$1,980
Year ended December 31, 2003	$	1,178	$	1,790	$	--	$	949	$	2,019
Year ended December 31, 2002	$	979	$	236	$	--	$	37	$	1,178

Exhibit	Description
3.1	Amended and Restated Certificate of Incorporation of Ventiv Health, Inc. (filed as Exhibit 3.1 to the Registrant's Form 10 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
3.2a	By-Laws of Ventiv Health, Inc. (filed as Exhibit 3.2 to the Registrant's Form 10 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
3.2b	Amendment to By-Laws of Ventiv Health, Inc. adopted May 23, 2003
3.2c	Amendments to By-Laws of Ventiv Health, Inc. adopted September 17, 2003
3.2d	Amendment to By-Laws of Ventiv Health, Inc. adopted March 10, 2004
4.1	Specimen form of certificate representing Ventiv Health, Inc. common stock (filed as Exhibit 4.1 to the Registrant's Form 10 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.1	Form of Distribution Agreement between Snyder Communications, Inc. and Ventiv Health, Inc. (filed as Exhibit 10.1 to the Registrant's Form 10 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.2	Form of Tax Sharing Agreement between Snyder Communications, Inc. and Ventiv Health, Inc. (filed as Exhibit 10.2 to the Registrant's Form 10 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.4	Ventiv Health, Inc. 1999 Stock Incentive Plan, as amended.
10.4.1	Form of Executive Officer Stock Option Agreement.
10.4.2	Form of Director Stock Option Agreement.
10.4.3	Form of Restricted Stock Agreement.
10.5	Employment Agreement, dated June 14, 1999 by and between Eran Broshy and Snyder Communications, Inc. (filed as Exhibit 10.5 to the Registrant's Form 10 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.5.1	Amendment dated January 1, 2004 to Employment Agreement, dated June 14, 1999, by and between Eran Broshy and Snyder Communications, Inc. (filed as Exhibit 10.5.1 to the Registrant's Annual Report on Form 10-K filed for the fiscal year ended December 31, 2003 with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.9	Employment Agreement, dated August 13, 2001 by and between John R. Emery and Ventiv Health, Inc. (filed as Exhibit 10.9 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2001 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.9.1	Amendment dated January 1, 2004 to Employment Agreement, dated August 13, 2001, by and between John R. Emery and Ventiv Health, Inc. (filed as Exhibit 10.9.1 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2003 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.10	Credit Agreement, dated March 29, 2002, among Ventiv Health, certain subsidiaries of Ventiv Health, Inc., and Foothill Capital Corporation. (filed as Exhibit 10.10 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2002 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.11	Employment Agreement, dated April 8, 2002 by and between Terrell Herring and Ventiv Health, Inc. (filed as Exhibit 10.11 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2002 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.11.1	Amendment dated January 1, 2004 to Employment Agreement, dated April 8, 2002, by and between Terrell Herring and Ventiv Health, Inc. (filed as Exhibit 10.11.1 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2003 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.12	Asset Purchase Agreement dated as of September 21, 2004 among Ventiv Health, Inc., Smith Hanley Holding Corporation and the other parties thereto (filed as Exhibit 2.1 to the Registrant's Form 8-K/A filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended, on December 29, 2004). * #
10.13	Ventiv Health, Inc. 2005 Deferred Compensation Plan (filed as Exhibit 10.1 to the Registrant's Form 8-K filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended, on November 29, 2004). *
21.1	Subsidiaries of Ventiv Health, Inc.
23	Consent of Deloitte & Touche LLP.
31.1	Chief Executive Officer’s Certification Pursuant to Rule 13a-14(a) of the Exchange Act
31.2	Chief Financial Officer’s Certification Pursuant to Rule 13a-14(a) of the Exchange Act
32.1	Chief Executive Officer's Certification of Financial Statements Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Chief Financial Officer's Certification of Financial Statements Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*Signature*	*Title*	*Date*

/s/ ERAN BROSHY	Chief Executive Officer and Director	March 31, 2005
Eran Broshy	(Principal Executive Officer)

/s/ JOHN R. EMERY	Chief Financial Officer	March 31, 2005
John R. Emery	(Principal Financial Officer and Principal Accounting Officer)

/s/ DANIEL M. SNYDER	Chairman of the Board	March 31, 2005
Daniel M. Snyder

/s/ DONALD CONKLIN	Director	March 31, 2005
Donald Conklin

/s/ JOHN R. HARRIS	Director	March 31, 2005
John R. Harris

/s/ MARK E. JENNINGS	Director	March 31, 2005
Mark E.Jennings

/s/ PER G.H. LOFBERG	Director	March 31, 2005
Per G.H. Lofberg

/s/ A. CLAYTON PERFALL	Director	March 31, 2005
A. Clayton Perfall

2.	Registration Under Federal and State Securities Laws: The Options may not be exercised and the Corporation is not required to deliver the Option Shares deliverable upon any such exercise unless such Option Shares have been registered under Federal and applicable state securities laws, or the delivery of such Option Shares is then exempt from such registration requirements.

3.	Forfeiture of Options: The Options are subject to forfeiture in accordance with Section 7.1(i) of the Plan.

4.	Expiration Date: The Options expire three months after termination of employment, except if the Optionee terminates employment by reason of death or Disability, in which case the Options expire one year after termination of employment Subject to earlier termination as provided in this Agreement and the Plan, the Options expire on [ten years from grant date].

a.	Number of Option Shares:

b.	Type of Option: Nonqualified Stock Option (i.e., an option which is not an incentive stock option under Section 422 of the Code).

c.	Vesting: The options will become vested in accordance with the following schedule provided that you are still a member of the Board of Directors of the Corporation on the applicable vesting date.

1.	Restricted Stock Award. Subject to the terms and conditions set forth in this Agreement, the Company hereby grants to the Executive, as of the date hereof (the "Grant Date"), an award of X,XXX shares of common stock, par value $.001 per share, of the Company (the "Restricted Stock"). Subject to the terms of this Agreement, the Executive shall be entitled to exercise and enjoy all rights and entitlements, and will be subject to all obligations and restrictions, of ownership of the Restricted Stock as set forth in the Company's Certificate of Incorporation, as amended. The Restricted Shares are granted under the Ventiv Health, Inc. 1999 Stock Incentive Plan (the "Plan") and shall be governed by terms of the Plan, the terms of which are incorporated by reference into this Restricted Stock Award Agreement.

2.	Restrictions. The following restrictions shall apply to each share of Restricted Stock: (i) until such Restricted Stock vests in accordance with Section 3 hereof, one or more stock certificates representing the Restricted Stock will be issued in the Executive's name, but will be held in custody by the Company or an escrow agent (which may be a brokerage firm) appointed by the Company; (ii) the stock certificate or certificates representing the Restricted Stock shall bear the legends provided for in Sections 8(a) and 8(b) below; (iii) the Executive will not sell, transfer, assign, give, place in trust, or otherwise dispose of or pledge, grant a security interest in, or otherwise encumber the Restricted Stock or any economic interest therein, whether or not vested, until ( anniversary of grant date) and any such attempted disposition or encumbrance shall be void and unenforceable against the Company; and (iv) upon termination of the Executive's employment with the Company for any reason whatsoever, with or without cause, whether voluntarily or involuntarily, all shares of Restricted Stock which had not vested as of the date of such termination will be forfeited and returned to the Company, and all rights of the Executive or the Executive's heirs in and to such shares will terminate, unless the Board of Directors of the Company (the "Board") determines otherwise in its sole and absolute discretion.

3.	Vesting of Restricted Stock. The Restricted Stock will vest as follows:

4.	Effect of Vesting. Subject to the provisions of this Agreement, upon the vesting of any shares of Restricted Stock, the Company will deliver to the Executive a certificate or certificates for the number of shares of Restricted Stock which had so vested, endorsed with the legends provided for in Sections 8(a) and 8(b). Alternatively, the Company may elect to deliver vested shares of Restricted Stock electronically, and if it does so, the Executive agrees to establish an account with a brokerage firm selected by the Company for the purpose of receiving such shares.

5.	Regulatory Compliance. The issuance and delivery of any stock certificates representing vested shares of Restricted Stock may be postponed by the Company for such period as may be required to comply with any applicable requirements under the federal securities laws or under any other law or regulation applicable to the issuance or delivery of such shares. The Company shall not be obligated to deliver any vested shares of Restricted Stock to the Executive if the Company believes that such delivery would constitute a violation of any applicable law or regulation.

6.	Representations and Warranties. The Executive hereby represents and warrants that the Restricted Stock awarded pursuant to this Agreement is being acquired for the Executive's own account, for investment purposes and not with a view to distribution thereof. The Executive acknowledges and agrees that any sale or distribution of shares of Restricted Stock that have become vested may be made only pursuant to either (i) a registration statement on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), which registration statement has become effective and is current with regard to the shares being sold, or (ii) a specific exemption from the registration requirements of the Securities Act that is confirmed in a favorable written opinion of counsel, in form and substance satisfactory to counsel for the Company, prior to any such sale or distribution. The Executive hereby consents to such action as the Board or the Company deems necessary or appropriate from time to time to prevent a violation of, or to perfect an exemption from, the registration requirements of the Securities Act or to implement the provisions of this Agreement, including but not limited to placing restrictive legends on certificates evidencing shares of Restricted Stock (whether or not vested) and delivering stop transfer instructions to the Company's stock transfer agent.

7.	Withholding. The Executive acknowledges that the Company will have certain withholding obligations upon the issuance to the Executive of shares of Restricted Stock. It shall be a condition to the issuance to the Executive of the shares of Restricted Stock that the Executive pay to the Company such amounts as it is required to withhold or, with the consent of the Company, otherwise provide for the discharge of the Company's withholding obligations. If any such payment is not made by the Executive, the Company may deduct the amounts necessary to satisfy the Company's withholding obligations, plus interest thereon, from payments of any kind to which the Executive would otherwise be entitled. Notwithstanding the foregoing, if the Executive is an “executive officer” within the meaning of Section 402 of the Sarbanes-Oxley Act of 2002, the Company reserves the right to require shares of Restricted Stock that would otherwise vest pursuant to this Agreement to instead be forfeited and canceled if the Executive has not paid or (to the extent permitted above) otherwise provided for the discharge of the Company’s withholding obligations on or prior to the date such withholding obligations are required to be satisfied by the Company.

8.	Legends. (a) Prior to (last anniversary of grant date), each certificate representing shares of Restricted Stock shall be endorsed with a legend in substantially the following form:

	"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A CERTAIN RESTRICTED STOCK AWARD AGREEMENT, DATED AS OF (GRANT DATE), WHICH PROVIDES, AMONG OTHER THINGS, FOR CERTAIN RESTRICTIONS ON THE TRANSFER AND ENCUMBRANCE OF SUCH SHARES. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY"

	(b) In addition to the legend set forth in paragraph (a) and above, until registered under the Securities Act, each certificate representing shares of Restricted Stock shall be endorsed with a legend in substantially the following form:

	"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT SUCH REGISTRATION, EXCEPT UPON DELIVERY TO THE COMPANY OF SUCH EVIDENCE AS MAYBE SATISFACTORY TO COUNSEL FOR THE COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER";

9.	No Right to Continued Employment. This Agreement does not confer upon the Executive any right to continued employment by the Company or any of its subsidiaries or affiliated companies, nor shall it interfere in any way with the right of the Executive's employer to terminate the Executive's employment at any time for any reason or no reason.

10.	Miscellaneous

	(a) Construction. This Agreement will be construed by and administered under the supervision of the Board, and all determinations of the Board will be final and binding on the Executive.

	(b) Dilution. Nothing in this Agreement will restrict or limit in any way the right of the Board to issue or sell stock of the Company (or securities convertible into stock of the Company) on such terms and conditions as it deems to be in the best interests of the Company, including, without limitation, stock and securities issued or sold in connection with mergers and acquisitions, stock and securities issued or sold in connection with investments in the Company, stock issued or sold in connection with any stock option or similar plan, and stock issued or contributed to any qualified stock bonus or employee stock ownership plan.

	(c) Notices. Any notice hereunder shall be in writing and personally delivered or sent by registered or certified mail, return receipt requested, and addressed to the Company at Ventiv Health, Inc., 200 Cottontail Lane, Vantage Court North, Somerset, New Jersey 08873, Attention: Chief Financial Officer, or to the Executive at 200 Cottontail Lane, Vantage Court North, Somerset, New Jersey 08873, subject to the right of any party hereto to designate at any time hereafter in writing some other address.

	(d) Counterparts. This Agreement may be executed in counterparts each of which taken together shall constitute one and the same instrument

	(e) Governing Law. This Agreement, which constitutes the entire agreement of the parties with respect to the grant to the Executive of the Restricted Stock, shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without regard to principles thereof regarding conflict of laws.

	(f) Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

	(g) Amendment and Waiver. The provisions of this Agreement may be amended and waived only with the prior written consent of the Company and the Executive.