<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
CATALINA MARKETING CORPORATION
- --------------------------------------------------------------------------------
(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)(1) 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:
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<PAGE> 2
[Catalina Corp Logo]
NOTICE OF ANNUAL MEETING
TO BE HELD ON
JULY 21, 1998
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders of
CATALINA MARKETING CORPORATION, a Delaware corporation (herein called the
"Company"), will be held at the offices of the Company, 11300 9th Street North,
St. Petersburg, Florida 33716 on Tuesday, July 21, 1998 at 9:00 AM (the "Annual
Meeting") for the following purposes:
1. To elect three Class I Directors;
2. To ratify and approve the Company's independent public accountants for
fiscal 1999; and
3. To consider and act upon any other matters which may properly come
before the Annual Meeting and any adjournment thereof.
In accordance with the provisions of the Company's Bylaws, the Board of
Directors has fixed the close of business on June 1, 1998 as the record date for
the determination of the holders of Common Stock entitled to notice of and to
vote at the Annual Meeting.
A list of stockholders entitled to vote at the Annual Meeting will be open
for examination by any stockholder for any purpose germane to the meeting during
ordinary business hours for a period of 10 days prior to the Annual Meeting at
the offices of the Company, 11300 9th Street North, St. Petersburg, Florida
33716, and will also be available for examination at the Annual Meeting until
its adjournment.
YOUR ATTENTION IS DIRECTED TO THE ACCOMPANYING PROXY STATEMENT. WE INVITE
ALL STOCKHOLDERS TO ATTEND THE ANNUAL MEETING. TO ENSURE THAT YOUR SHARES WILL
BE VOTED AT THE ANNUAL MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED
PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU ATTEND THE ANNUAL
MEETING, YOU MAY VOTE IN PERSON, EVEN THOUGH YOU HAVE SENT IN YOUR PROXY.
By Order of the Board of Directors,
/s/George W. Off
George W. Off
Chief Executive Officer
St. Petersburg, Florida
June 19, 1998
IMPORTANT: Whether or not you plan to attend the meeting, you are requested to
complete and promptly return the enclosed proxy in the envelope provided.
<PAGE> 3
PROXY STATEMENT
CATALINA MARKETING CORPORATION
11300 9TH STREET NORTH
ST. PETERSBURG, FLORIDA 33716
------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
JULY 21, 1998
------------------------
SOLICITATION AND REVOCATION OF PROXIES
The enclosed proxy is solicited by and on behalf of the Board of Directors
of CATALINA MARKETING CORPORATION, a Delaware corporation (the "Company"), for
use at the Company's 1998 Annual Meeting of Stockholders to be held on Tuesday,
July 21, 1998 at 9:00 AM at the Company's offices, 11300 9th Street North, St.
Petersburg, Florida 33716, and at any and all adjournments thereof (the "Annual
Meeting"), for the purposes set forth in the accompanying Notice of Annual
Meeting. Any stockholder has the power to revoke his or her proxy at any time
before it is voted. A proxy may be revoked by delivering written notice of
revocation to the Company at its principal office, 11300 9th Street North, St.
Petersburg, Florida 33716, Attention: Corporate Secretary, by a subsequent proxy
executed by the person executing the prior proxy and presented at the meeting,
or by attendance at the Annual Meeting and voting in person by the person
executing the proxy. In addition to this solicitation, officers, directors and
regular employees of the Company, who will receive no additional compensation
for their services, may solicit proxies by mail, telegraph or personal calls.
The Company may, but does not currently plan to, engage a proxy solicitation
firm in connection with the solicitation of proxies. The expense of any such
engagement is not expected to exceed $10,000. All costs of solicitation will be
borne by the Company. The Company has requested brokers and nominees who hold
stock in their name to furnish this proxy material to their customers and the
Company will reimburse such brokers and nominees for their related out-of-pocket
expenses. This Proxy Statement of the Company will be mailed on or about June
19, 1998 to each stockholder of record as of the close of business on June 1,
1998.
VOTING AT THE MEETING
The Company had 18,424,842 shares of Common Stock, par value $.01 per share
(the "Common Stock"), outstanding as of June 1, 1998. Holders of record of
shares of Common Stock at the close of business on June 1, 1998 will be entitled
to notice of and to vote at the Annual Meeting and will be entitled to one vote
for each such share so held of record. Holders of a majority of the outstanding
shares, if present in person or represented by proxy, will constitute a quorum
at the Annual Meeting. Abstentions and "broker non-votes" (which occur if a
broker or other nominee does not have discretionary authority and has not
received voting instructions from the beneficial owner with respect to the
particular item) are counted for purposes of determining the presence or absence
of a quorum for the transaction of business. In all matters other than the
election of directors, the affirmative vote of the majority of shares present in
person or by proxy at the Annual Meeting and entitled to vote thereon are
required to approve the proposals set forth herein. For such proposals,
abstentions are counted for purposes of calculating shares entitled to vote but
are not counted as shares voting and therefore have the effect of a vote against
each such proposal. Also, for these proposals, broker non-votes are not counted
as shares present at the meeting and entitled to vote and therefore have no
effect. Directors will be elected by a plurality of the votes of the shares
present in person or represented by proxy and entitled to vote. Accordingly,
abstentions and broker non-votes will have no effect on the outcome of the
election of directors.
<PAGE> 4
NOMINATION AND ELECTION OF DIRECTORS
(PROPOSAL 1)
The persons named in the enclosed proxy will vote FOR the three nominees
named below under "Nominees for Directors" as the three Class I Directors,
unless instructed otherwise in the proxy. The persons receiving the greatest
number of votes, up to the number of directors to be elected, shall be the
persons elected as Class I Directors. Each Class I Director is to hold office
until the 2001 Annual Meeting of Stockholders and until his or her respective
successor is duly qualified and elected.
The names and certain information concerning the persons to be nominated to
become directors by the Board of Directors at the Annual Meeting are set forth
below. YOUR BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF EACH OF THE NOMINEES NAMED BELOW UNDER "NOMINEES FOR DIRECTORS". It
is intended that shares represented by the proxies will be voted FOR the
election to the Board of Directors of the persons named below unless authority
to vote for nominees has been withheld in the proxy. Although each of the
persons nominated has consented to serve as a director if elected and your Board
of Directors has no reason to believe that any of the nominees will be unable to
serve as a director, if any nominee withdraws or otherwise becomes unavailable
to serve, the persons named as proxies will vote for any substitute nominee
designated by the Board of Directors. The following information regarding the
Company's directors (including the nominees) and executive officers is relevant
to your consideration of the slate proposed by your Board of Directors.
DIRECTORS, EXECUTIVE OFFICERS AND OTHER SIGNIFICANT EMPLOYEES
The directors and nominees for director of the Company and executive
officers and other significant employees of the Company as of the date of this
Proxy Statement, are as follows:
<TABLE>
<S> <C> <C>
Tommy D. Greer......................... 66 Chairman of the Board
George W. Off.......................... 51 Chief Executive Officer and Director
Daniel D. Granger...................... 49 President and Chief Operating Officer,
President, Catalina Marketing Services
Division ("CMS") and Director
Philip B. Livingston................... 41 Senior Vice President and Chief
Financial Officer
Michael G. Bechtol..................... 41 Executive Vice President, Retail, CMS
David M. Diamond....................... 39 Executive Vice President, Marketing and
New Applications, CMS
Michael T. McClorey.................... 38 President, Health Resource Publishing
Company ("HRP")
Helene Monat........................... 51 Executive Vice President, Sales and
Marketing, HRP and Director
Frank H. Barker........................ 67 Director
Frederick W. Beinecke.................. 55 Director
Patrick W. Collins..................... 69 Director
Stephen I. D'Agostino.................. 64 Director
Thomas W. Smith........................ 70 Director
Michael B. Wilson...................... 61 Director
</TABLE>
The Board of Directors is divided into three classes, with each class
holding office for staggered three year terms. The terms of Class I Directors
Frank H. Barker, Patrick W. Collins and George W. Off expire in 1998, the terms
of Class II Directors Frederick W. Beinecke, Tommy D. Greer, Helene Monat and
Thomas W. Smith expire in 1999 and the terms of Class III Directors Stephen I.
D'Agostino, Daniel D. Granger and
2
<PAGE> 5
Michael B. Wilson expire in 2000. All executive officers of the Company are
chosen by the Board of Directors and serve at the Board's discretion. No family
relationships exist between any of the officers or directors of the Company.
ATTENDANCE AT MEETINGS AND BOARD COMMITTEES
During the fiscal year ended March 31, 1998, the Board of Directors held a
total of six meetings. Each member of the Board of Directors attended at least
75% of the meetings of the Board and of the committees of which he or she was a
member, with the exception of Frank H. Barker who attended one of two Audit
committee meetings prior to his resignation from such Committee in mid 1997.
The standing committees of the Board of Directors are the Compensation
Committee, the Director Grant Plan Committee, the Audit Committee, the
Nominating Committee and the International Committee.
The Compensation Committee, which met on four occasions in fiscal 1998, is
responsible for: (i) reviewing and recommending to the Board of Directors an
integrated compensation and incentive program for all levels of management; (ii)
reviewing, approving and recommending to the Board of Directors other employee
compensation plans; and, (iii) reviewing and approving compensation plans for
members of the Board of Directors. In addition, the Compensation Committee is
responsible for: (a) granting options to purchase Company stock pursuant to the
Company's Amended and Restated 1989 Stock Option Plan; (b) determining the
number of shares subject to options granted and the exercise price per share;
and (c) administering such plan pursuant to its terms. Also, the Compensation
Committee has full and exclusive discretionary authority to (1) construe,
interpret and apply the terms of the Company's Employee Payroll Deduction Stock
Purchase Plan; (2) determine eligibility and adjudicate all disputed claims
under such Plan; and (3) administer such Plan in accordance with its terms. The
Committee currently consists of Frederick W. Beinecke as Chairman, Patrick W.
Collins and Michael B. Wilson.
The Director Grant Plan Committee, which did not meet in fiscal 1998, is
responsible for administering the 1992 Director Grant Plan pursuant to its
terms. The Committee currently consists of Tommy D. Greer as Chairman and George
W. Off.
The Audit Committee, which met on four occasions in fiscal 1998, is
responsible for: (i) reviewing the Company's financial results and the scope and
results of audits; (ii) evaluating the Company's system of internal controls and
meeting with independent auditors and appropriate Company financial and auditing
personnel concerning the Company's system of internal controls; (iii)
recommending to the Board of Directors the appointment of the independent
auditors; and (iv) evaluating the Company's financial reporting activities and
the accounting standards and principles followed. The Committee currently
consists of Stephen I. D'Agostino as Chairman and Thomas W. Smith.
The Nominating Committee, which met on one occasion in fiscal 1998, is
responsible for recommending qualified candidates for election as directors of
the Company, including the slate of directors which the Board of Directors
proposes for election by stockholders at each annual meeting, and for making
recommendations to the Board of Directors concerning the structure and
membership of the committees of the Board of Directors. In carrying out its
functions in regard to Board membership, the Committee will consider nominees
recommended by stockholders upon written submission of pertinent data to the
attention of the Corporate Secretary. Such data should include complete
information as to the identity of the proposed nominee, including name, address,
present and prior business and/or professional affiliations, education and
experience, particular field or fields of expertise, and the reasons why, in the
opinion of the recommending stockholder, the proposed nominee is qualified and
suited to be a director of the Company as well as what particular contribution
to the success of the Company such person could be expected to make. The
Committee currently consists of Stephen I. D'Agostino as Chairman, Frederick W.
Beinecke, Tommy D. Greer and George W. Off.
The International Committee, which was formed in July 1997 and met on two
occasions in fiscal 1998, is responsible for supervising the management of and
providing oversight for the Company's international operations. The Committee
currently consists of Frank H. Barker and Helene Monat.
3
<PAGE> 6
NOMINEES FOR DIRECTORS
The following three persons will be placed in nomination for election to
the Board of Directors as Class I Directors. The shares represented by the proxy
cards returned will be voted FOR the election of these nominees unless otherwise
stated in the proxy.
Frank H. Barker, who was elected as a director of the Company in January
1996, has served as President and Chief Executive Officer of US Dermatologics,
Inc. since October 1997. Until his retirement in January 1996, Mr. Barker served
as Corporate Vice President responsible for public relations and government
affairs and Company Group Chairman responsible for the ophthalmic business and
the health promotion/disease prevention business of Johnson & Johnson. Prior to
his retirement, Mr. Barker had been employed by Johnson & Johnson for more than
twenty-five years.
Patrick W. Collins, who was elected as a director of the Company in July
1995, was, until his retirement in March 1994, the Vice Chairman and Chief
Operating Officer of Ralphs Grocery Company, and a director of Ralphs from 1988
until March 1994. Prior to his most recent position, Mr. Collins was Ralphs'
President from February 1976 until March 1994. Mr. Collins is also a director of
Bristol Farms and PIA Merchandising Inc.
George W. Off, one of the Company's founders, became Chief Executive
Officer in July 1994 and served as President from October 1992 until April 1998.
Prior to that, Mr. Off was Chief Operating Officer from October 1992 until July
1994, after serving as the Company's Executive Vice President from April 1990 to
October 1992. Mr. Off was re-elected as a director of the Company in October
1992 after serving in that capacity from 1983 until January 1990. Mr. Off is
also a director of Telephone and Data Systems, Inc.
OTHER DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
Tommy D. Greer was the Company's Chief Executive Officer from January 1992
until July 1994, after serving as its President and Chief Operating Officer from
January 1989 to January 1992. Mr. Greer has been a director of the Company since
April 1989 and currently serves as Chairman. Effective January 1997, Mr. Greer's
responsibilities were reduced with the President and Chief Executive Officer of
the Company assuming certain of Mr. Greer's day to day responsibilities. Before
joining the Company, Mr. Greer had been retired. Prior to retirement Mr. Greer
spent 25 years at Texize Chemicals Company, a household products manufacturer,
where he was responsible for conceptualizing and marketing many popular cleaning
products, including Fantastik Spray Cleaner, Spray & Wash, K2R and Glass Plus.
Mr. Greer was President of Texize from 1969 to 1975.
Daniel D. Granger became President and Chief Operating Officer and has
served as a director of the Company since April 1998. Mr. Granger has served as
President of CMS, a business unit of the Company, since January 1996. He also
served as Executive Vice President, Sales of the Company from January 1996 until
April 1998. Prior to January 1996, Mr. Granger had been employed with the
Company for eight years, most recently serving as Chief Executive Officer and
President of Catalina Electronic Clearing Services, a business unit of the
Company.
Philip B. Livingston joined the Company as Senior Vice President and Chief
Financial Officer in October 1995. From 1993 to 1995 he was Vice President and
Chief Financial Officer of Celestial Seasonings, Inc., a manufacturer of
specialty tea. From 1989 to 1993 he was Vice President and Chief Financial
Officer of Kenetech Corporation, an independent energy company. From 1985 to
1989 he held various financial management positions for Genentech, Inc., a
manufacturer of pharmaceutical products. Mr. Livingston is a certified public
accountant.
Michael G. Bechtol has served as Executive Vice President, Retail, CMS,
since April 1997. In such capacity Mr. Bechtol directs all retail management
activities for the Company's core business in the United States. Mr. Bechtol has
been employed by the Company in various capacities since 1986.
David M. Diamond has served as Executive Vice President, Marketing and New
Applications, CMS, since January 15, 1997. Prior to joining the Company, Mr.
Diamond was a marketing consultant from 1993 to
4
<PAGE> 7
1996, served as President of Lamaze Publishing Company from 1991 to 1992, and
was Senior Vice President of New Products with ActMedia from 1988 to 1991.
Michael T. McClorey has been President of Health Resource Publishing
Company, a subsidiary of the Company, since April 3, 1995. Mr. McClorey joined
the Company in 1986 and has served in a variety of sales and retail management
positions for the Company, most recently as a senior vice president.
Frederick W. Beinecke was elected as a director of the Company in January
1993, and also served as a director of the Company from 1985 until January 1990.
He has been the President of Antaeus Enterprises, Inc. (a venture capital and
marketable securities investment company) since 1982. Mr. Beinecke is also a
director of several private companies.
Stephen I. D'Agostino was elected as a director of the Company in February
1988. Mr. D'Agostino is a consumer marketing consultant and was Chairman of Lord
Capital Corporation, an investment bank, from January 1989 to December 1991 and
Chairman of Texas State Optical Corp., an optical stores franchiser, from August
1990 to December 1991. Mr. D'Agostino is a director of Super Value Stores, Inc.,
a grocery wholesaler.
Helene Monat was elected as a director of the Company in October 1992.
Since February 1, 1998, Ms. Monat has served as Executive Vice President, Sales
and Marketing, of HRP, a subsidiary of the Company. From January 1997 until
January 1998, Ms. Monat served as Vice President, Sales and Marketing of
Intelledge Corporation, a marketer of in-store electronic shelf labels and
promotional services. From July 1992 until April 1996, Ms. Monat served as the
Company's Executive Vice President, Sales. From February 1995 until April 1996,
she served as President of Catalina Marketing Services, a business unit of the
Company. She was Senior Vice President, Sales, from April 1990 until July 1992
and Vice President, Sales East, prior to that time.
Thomas W. Smith was elected as a director of the Company in July 1994. Mr.
Smith founded and has been President of Prescott Investors, Inc., an investment
advisory firm, since 1973. Mr. Smith is on the board of directors of MacDermid,
Inc., a distributor of specialty chemicals.
Michael B. Wilson was elected as a director of the Company in January 1993.
He was Vice President, Sales and Marketing, Consumer and Commercial Paper
Products, for Georgia-Pacific Corporation until his retirement in September
1992. Mr. Wilson also serves on the board of Worldtex, Inc., a covered yarn
manufacturer.
CERTAIN TRANSACTIONS
In January 1996, the Company and Helene Monat entered into a Consulting
Agreement pursuant to which Ms. Monat provided consultative and advisory
services to the Company under which she received aggregate compensation during
fiscal 1998 of $75,000. The Consulting Agreement had an original term of three
years, expiring in January 1999, but was terminated upon Ms. Monat's employment
by HRP. This Consulting Agreement was entered into on an arm's length basis on
terms no less favorable to the Company than could have been obtained with an
unrelated third party.
5
<PAGE> 8
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 31, 1998, certain information
regarding the ownership of Common Stock of each person known by the Company to
be the beneficial owner of more than five percent of the outstanding shares of
the Company's Common Stock, each of its directors and executive officers and all
directors and executive officers as a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(1)
OFFICERS, DIRECTORS AND -------------------
5 PERCENT STOCKHOLDERS NUMBER PERCENT
----------------------- --------- -------
<S> <C> <C>
T. Rowe Price Associates (2)................................ 2,512,300 13.7%
100 E. Pratt Street
Baltimore, MD 21202
The Prudential Insurance Company of America (3)............. 1,864,955 10.1%
Prudential Plaza
Newark, NJ 07102
Jennison Associates Capital Corp. (3)....................... 1,829,100 10.0%
466 Lexington Avenue
New York, NY 10017
William Blair & Company, L.L.C.............................. 1,407,595 7.7%
222 West Adams Street
Chicago, IL 60606
Frederick W. Beinecke (4)................................... 1,141,800 6.2%
c/o Antaeus Enterprises Inc.
99 Park Avenue, Suite 2200
New York, NY 10016
Thomas W. Smith (5)......................................... 979,924 5.3%
323 Railroad Avenue
Greenwich, CT 06830
Antaeus Enterprises, Inc. (4)............................... 1,044,794 5.7%
99 Park Avenue, Suite 2200
New York, NY 10016
Tommy D. Greer.............................................. 194,115 1.0%
George W. Off............................................... 213,546 1.2%
Daniel D. Granger........................................... 82,429 *
Philip B. Livingston........................................ 31,852 *
Frank H. Barker (6)......................................... 667 *
Patrick W. Collins.......................................... 1,109 *
Stephen I. D'Agostino (7)................................... 82,844 *
Helene Monat (8)............................................ 73,128 *
Michael B. Wilson........................................... 6,430 *
All directors and executive officers as a group (11
persons).................................................. 2,807,844 14.9%
</TABLE>
- ---------------
* Amount represents less than 1% of the Company's Common Stock.
(1) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission, and includes generally voting power or
investment power with respect to securities. Shares of Common Stock subject
to options currently exercisable or exercisable within 60 days are deemed
outstanding for computing the percentage ownership of the person holding the
options but are not deemed outstanding for computing the percentage
ownership of any other person. Such shares are included for Messrs.
Greer -- 145,000, Off -- 115,000, Granger -- 64,248 and Livingston -- 25,975
and Ms. Monat -- 53,259 and all directors and executive officers as a
group -- 403,482, all of which options are exercisable within 60 days of
March 31, 1998. The beneficial ownership reported above does not include
phantom stock units (each unit being the non-voting economic equivalent to
one share of Common
6
<PAGE> 9
Stock) held by certain officers and directors of the Company under the
Catalina Marketing Corporation Deferred Compensation Plan as follows:
Messrs. Barker -- 1,729.06 units, Collins -- 1,333 units,
D'Agostino -- 719.68 units, Off -- 102,631.37 units, Livingston -- 2,298.74
units, Smith -- 2,488.79 units, Wilson -- 2,885.72 units and Ms.
Monat -- 2,500.77 units. Information with respect to beneficial owners of
more than five percent of the outstanding shares of the Company's Common
Stock is provided based on Schedules 13G or 13D filed by such persons or
more recent information provided by such persons.
(2) These securities are owned by various individual and institutional investors
for which T. Rowe Price Associates, Inc. ("Price Associates") serves as
investment adviser with power to direct investments and/or power to vote the
securities. For purposes of the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), Price Associates is
deemed to be a beneficial owner of such securities; however, Price
Associates expressly disclaims that it is, in fact, the beneficial owner of
such securities.
(3) The Prudential Insurance Company of America ("Prudential") has direct or
indirect voting and/or investment discretion with respect to these
securities which are held for the benefit of clients by Prudential's
separate accounts, internally managed accounts, registered investment
companies, subsidiaries and/or other affiliates. For purposes of the
reporting requirements of the Exchange Act, Prudential is deemed to be a
beneficial owner of such securities; however, Prudential expressly disclaims
that it is, in fact, the beneficial owner of such securities. Prudential
owns 100% of the stock of Jennison Associates Capital Corp. ("Jennison"). As
a result, Prudential may be deemed to have the power to exercise or direct
the exercise of the voting and/or dispositive power that Jennison may have
with respect to shares of Common Stock beneficially owned by Jennison. The
shares reported by Prudential with the Securities and Exchange Commission
may include shares held by Jennison. It is unclear, based on a review of
Prudential's and Jennison's Schedule 13G filings, whether Prudential's
reported ownership includes shares of Common Stock beneficially owned by
Jennison.
(4) Frederick W. Beinecke, a director of the Company, is the President and a
director of Antaeus Enterprises, Inc. ("Antaeus"). Mr. Beinecke is also a
beneficiary of a trust that is one of four trusts, each of which owns 25% of
Antaeus, resulting in the attribution of beneficial owner to Mr. Beinecke of
the shares held by Antaeus. The shares listed for Mr. Beinecke include
42,006 shares owned directly by him, 1,044,794 shares held by Antaeus and
55,000 shares held by a trust for his benefit. Antaeus and Mr. Beinecke may
be deemed to be part of a group, together with a trust, which group would
beneficially own 1,141,800 shares constituting approximately 6.2% of the
Company's outstanding shares. Except for the shares owned directly by each
of them, Antaeus and Mr. Beinecke disclaim beneficial ownership of all
shares.
(5) Shares listed for Mr. Thomas W. Smith, a director of the Company, include
100,884 shares owned directly by Mr. Smith, 421,000 shares held by Idoya
Partners, a limited partnership of which Mr. Smith is general partner,
374,000 shares held by Prescott Associates, a limited partnership of which
Mr. Smith is general partner, 22,000 shares held by Prescott International
Partners, a limited partnership of which Mr. Smith is general partner,
18,000 shares held by Mr. Smith's wife and various other family members,
with respect to which he shares voting power, 17,640 shares held in accounts
for Mr. Smith's children over which he has trading authority, and 26,400
shares held by Prescott Investors profit sharing account of which Mr. Smith
is trustee.
(6) Mr. Barker also beneficially owns options to purchase 6,250 shares of common
stock of HRP, a subsidiary of the Company.
(7) Shares listed for Mr. D'Agostino include 1,900 shares held in an IRA account
by his wife. Mr. D'Agostino disclaims beneficial ownership of such shares.
(8) Shares listed for Ms. Monat include 378 shares held in a trust account for
the benefit of her child. Ms. Monat disclaims beneficial ownership of such
shares.
7
<PAGE> 10
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's executive
officers, directors and 10% stockholders to file reports regarding initial
ownership and changes in ownership with the Securities and Exchange Commission
and the New York Stock Exchange. Executive officers, directors and 10%
stockholders are required by the Securities and Exchange Commission regulations
to furnish the Company with copies of all Section 16(a) forms they file. The
Company's information regarding compliance with Section 16(a) is based solely on
a review of the copies of such reports furnished to the Company by the Company's
executive officers, directors and 10% stockholders. The Company is not aware of
any noncompliance with the requirements of Section 16(a) to file reports during
the Company's last fiscal year.
THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS
(PROPOSAL 2)
The Board of Directors has selected Arthur Andersen LLP to audit the
financial statements of the Company for the year ending March 31, 1999. Arthur
Andersen LLP has audited the Company's financial statements since 1985. The
persons named in the enclosed proxy will vote shares represented by proxies
returned to the Company FOR the proposal unless instructed otherwise in the
proxy.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSAL TO RATIFY AND APPROVE THE SELECTION OF THE ACCOUNTING FIRM ARTHUR
ANDERSEN LLP AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR FISCAL 1999.
A representative of Arthur Andersen LLP will be present at the Annual
Meeting to respond to any questions and to make a statement on behalf of his
firm, if he so desires.
TRANSACTION OF OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors is not aware
of any matters other than those set forth herein and in the Notice of Annual
Meeting that will come before the meeting. Should any other matters arise
requiring the vote of stockholders, it is intended that proxies will be voted in
respect thereto in accordance with the best judgment of the person or persons
voting the proxies.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is composed of Messrs.
Beinecke as Chairman, Collins and Wilson, all of whom are independent directors.
The Committee is responsible to the Board and indirectly to stockholders for
assuring that:
1. The Company's human resource policies are effective in attracting,
retaining and developing outstanding executive talent;
2. The Company has succession plans for senior management positions;
3. The Company's total compensation program supports the Company's business
goals and strategies, reinforces desired corporate behaviors, and
properly recognizes performance; and
4. The Company's compensation levels are internally equitable and
externally competitive.
The Committee sets compensation policies designed to maintain a strong
relationship between performance and rewards, to align the interests of the
executive officers with those of the stockholders and to actively encourage
ownership of the Company's Common Stock. The Committee's actions with regard to
executive officers who are members of the Board are subject to Board approval.
8
<PAGE> 11
EXECUTIVE COMPENSATION POLICY
The Company's compensation program is designed to attract, motivate, reward
and retain the management talent required to achieve aggressive corporate growth
and profitability objectives, and thereby increase stockholder value. It is the
Company's policy to provide conservatively competitive base salaries to attract
and retain highly capable managers, attractive annual incentive bonuses to
encourage and reward achievement of the Company's annual growth and
profitability goals, and significant equity opportunities to align the interests
of management with those of stockholders.
Because of the unique position the Company occupies within its market
sector, there are few peer companies with which the Company can compare its
management compensation. Consequently, the Compensation Committee does not rely
solely on competitive surveys to set management compensation levels. However,
the Compensation Committee does review the executive compensation levels in
other publicly held growth companies in related and other industries, and
obtains advice from independent consultants as to the Company's pay practices
and levels.
The tax deductibility of a senior executive's compensation is limited to $1
million a year unless such compensation is "performance based" or meets other
exemptions under the Code. It is the Company's policy to structure and
administer its compensation program for executives to maximize the tax
deductibility of executive compensation.
EXECUTIVE COMPENSATION PROGRAM
The principal elements of the executive compensation program are base
salary, annual incentive bonuses and stock options. Key management personnel
receive each element of compensation in various combinations, with the portion
of total compensation provided by annual incentive bonuses and stock options
increasing at higher management levels.
BASE SALARIES
The Compensation Committee reviews the salaries paid to the Company's
executive officers and considers increases based on several factors, including
competitive compensation data, individual performance, internal relationships
and the performance and prospects of the Company. Effective May 1, 1998, base
salaries for Messrs. Off and Livingston were increased by approximately 5%. As
of such date and taking into account his promotion to President and Chief
Operating Officer, Mr. Granger's base salary was increased by approximately 20%.
Also see, " -- Committee Decisions Affecting Chief Executive Officer's
Compensation" for a discussion of increases in Mr. Off's salary.
ANNUAL INCENTIVE BONUSES
Annual incentive bonuses are awarded to the Company's senior management
under the annual management incentive plan. Bonuses are set as a maximum
percentage of salary by management level and are earned based on individual and
Company performance in relation to financial and non-financial objectives set by
the Compensation Committee. Bonus maximums range from 20% of salary up to 80% of
salary. The objectives for senior management are recommended by the Chief
Executive Officer and approved by the Compensation Committee. Cash payments
under the annual management incentive plan ranged from 10% to 34% of individual
employees' salaries for fiscal 1998.
With the exception of Mr. Off's bonus, bonuses for fiscal year 1998 were
less than bonuses paid for fiscal year 1997. The Compensation Committee set
aggressive goals for the management of the Company for fiscal year 1998, which
goals were substantially, although not fully, achieved. Examples of the
Company's performance include a 26% increase in revenue and a 30% increase in
earnings per share for fiscal 1998 as compared to increases of 28% and 20%,
respectively, for fiscal 1997.
9
<PAGE> 12
STOCK OPTIONS
Annual stock option grants are recommended by the Chief Executive Officer
and are reviewed and approved by the Compensation Committee. Grants are based on
several factors, including an evaluation of individual performance, tenure with
the Company and management level. Special grants are considered to attract
experienced managers to join the Company. The Compensation Committee believes
that employee stock options are highly important to retain key employees and in
aligning employee interests with the stockholders' interests.
COMMITTEE DECISIONS AFFECTING CHIEF EXECUTIVE OFFICER'S COMPENSATION
As stated above, effective May 1, 1998, Mr. Off's base salary was increased
by approximately 5%. Mr. Off's salary level was determined based on his
performance and contribution to the Company's performance as evaluated by the
Compensation Committee and upon the Compensation Committee's examination of
information provided by a survey of executive compensation of other companies
similar to the Company.
Mr. Off's bonus for fiscal 1998 was determined by the Compensation
Committee based on specific financial and non-financial performance goals. Mr.
Off's incentive bonus of $137,000 for fiscal 1998, 34.2% of his salary, was
based upon the Compensation Committee's evaluation of his performance and
contribution to the Company's achievements in fiscal 1998, in which increases in
revenue, net income and earnings per share were 26%, 21% and 30%, respectively,
over the prior year. In relation to this performance, Mr. Off's annual
compensation for fiscal 1998 (salary paid and bonus earned) was 14.0% higher
than his annual compensation for the prior year.
In addition, the Compensation Committee granted a stock option for the
purchase of 50,000 shares to Mr. Off during fiscal 1998.
RESPECTFULLY SUBMITTED,
Frederick W. Beinecke Patrick W. Collins Michael B. Wilson
10
<PAGE> 13
COMPENSATION OF EXECUTIVE OFFICERS AND NON-EMPLOYEE DIRECTORS
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
UNDERLYING
FISCAL OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(a)($) BONUS($) GRANTED COMPENSATION(b)
- --------------------------- ------ ------------ -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
George W. Off (c) 1998 400,010 137,000 50,000 226,911
President, Chief Executive 1997 388,375 82,240 50,000 69,396
Officer and Director 1996 248,630 145,000 50,000 50,676
Daniel D. Granger (c) 1998 257,289 75,000 30,000 45,249
Executive Vice President 1997 220,000 110,000 50,000 21,633
Sales, and President 1996 195,100 115,000 -- 45,225
Catalina Marketing Services
Division
Philip B. Livingston (d) 1998 209,979 60,000 20,000 35,770
Senior Vice President 1997 188,247 65,000 -- 73,491
and Chief Financial Officer 1996 90,694 45,000 100,000 83,375
Tommy D. Greer (e) 1998 120,016 -- -- 31,886
Chairman of the Board 1997 284,744 87,549 -- 19,114
1996 250,016 120,000 -- 20,394
</TABLE>
- ---------------
(a) Salary includes all before-tax contributions by the employee to the
Company's Deferred Compensation Plan.
(b) Other compensation includes Company matching contributions and all earnings
(vested and non-vested) under the Company's Deferred Compensation Plan and
401(k) plan and reimbursement for moving expenses.
(c) After the end of the 1998 fiscal year, Mr. Granger became President and
Chief Operating Officer of the Company.
(d) Mr. Livingston joined the Company as Senior Vice President and Chief
Financial Officer in October, 1995.
(e) Effective January 1997, Mr. Greer's responsibilities were reduced with Mr.
Off assuming certain of Mr. Greer's day-to-day responsibilities.
11
<PAGE> 14
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
% OF TOTAL PRICE APPRECIATION
OPTIONS FOR OPTION TERM($)(b)
OPTIONS GRANTED EXERCISE EXPIRATION ----------------------
GRANTED(a) TO EMPLOYEES PRICE($) DATE 5% 10%
---------- -------------- -------- --------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
George W. Off (CEO)......... 50,000 10.82 25.875 4/22/02 357,439 789,847
Daniel D. Granger........... 30,000 6.49 25.875 4/22/02 214,464 473,908
Philip B. Livingston........ 20,000 4.33 25.875 4/22/02 142,976 315,939
Tommy D. Greer.............. -- -- -- -- -- --
</TABLE>
- ---------------
(a) Options granted generally have a term of five years, and become exercisable
at the rate of 25% per year, commencing one year after the date of grant,
except for options associated with a new hire which generally have a term of
six years, become exercisable at the rate of 20% per year, and are subject
to early termination in certain instances relating to termination of
employment.
(b) Potential Realizable Value is based on the assumption that the market price
of the stock appreciates at the stated rate, compounded annually, from the
date of grant to the expiration of the option. These values are calculated
based on requirements promulgated by the Securities and Exchange Commission
and do not reflect the Company's estimate of future stock price
appreciation.
OPTION EXERCISES AND YEAR END VALUE TABLE
<TABLE>
<CAPTION>
AT FISCAL YEAR END
------------------------------------------------------------
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS IN-THE-MONEY OPTIONS($)(a)
ACQUIRED VALUE ---------------------------- ----------------------------
ON EXERCISE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
George W. Off 49,170.46 5,761,774 67,500 122,500 1,846,563 2,907,188
(CEO)(b)............
Daniel D. Granger..... 18,252 574,938 44,248 67,500 1,284,618 1,322,812
Philip B. 14,034.65 349,539 20,975 80,000 568,947 2,162,500
Livingston(c).......
Tommy D. Greer........ -- -- 145,000 -- 4,522,190 --
</TABLE>
- ---------------
(a) The closing price of the Company's Common Stock was $52.625 per share on
March 31, 1998, the last business day of the fiscal year.
(b) Mr. Off exercised options to purchase 150,000 shares of Common Stock of
which 1,462.03 shares were withheld for payment of taxes and 49,170.46
shares were issued to Mr. Off. Receipt of the remaining 99,367.51 shares was
deferred under the Company's Deferred Compensation Plan and are held as
phantom units.
(c) Mr. Livingston exercised options to purchase 17,525 shares of Common Stock
of which 1,232.86 shares were withheld for payment of taxes and 14,034.65
shares were issued to Mr. Livingston. Receipt of the remaining 2,257.49
shares was deferred under the Company's Deferred Compensation Plan and are
held as phantom units.
12
<PAGE> 15
COMMON STOCK PRICE PERFORMANCE GRAPH
The following graph compares the Company's cumulative total return to
stockholders since March 31, 1993 with that of the New York Stock Exchange Index
and a peer group consisting of those public companies traded on an exchange and
listed under the Standard Industry Classification (S.I.C.) Code 731 for
Advertising, and other related S.I.C. Codes. The peer group is made up of:
Acxiom Corporation, Advo, Inc., Concord EFS, Inc., Cendant Corporation, Dun &
Bradstreet Corporation, Grey Advertising, Inc., Information Resources, Inc., PIA
Merchandising Services, Inc., Quick Response Services, Inc. and Valassis
Communications, Inc.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
CATALINA MARKETING CORPORATION,
NYSE MARKET INDEX AND PEER GROUP INDEX.
[GRAPH]
<TABLE>
<CAPTION>
CATALINA NYSE MKT
MEASUREMENT PERIOD MARKETING VALUATION PEER GROUP
(FISCAL YEAR COVERED) CORP. INDEX INDEX
<S> <C> <C> <C>
3/31/93 100 100 100
3/31/94 115 115 104
3/31/95 125 128 115
3/31/96 197 157 151
3/31/97 197 186 176
3/31/98 266 293 256
</TABLE>
Assumes $100 invested on March 31, 1993, in Catalina Marketing Corporation
at a closing price of $19.81 on such date, the New York Stock Exchange and the
peer group defined. Historical results are not necessarily indicative of future
performance.
NON-EMPLOYEE DIRECTOR COMPENSATION
In addition to grants made pursuant to the Company's 1992 Director Stock
Grant Plan, non-employee directors receive $1,500 per day for each one day
meeting attended in person, including committee meetings. The Chairman of each
committee receives $3,000 annually. Also, non-employee directors receive a fee
of $300 for each telephonic Board or committee meeting of less than one hour, or
a fee of $1,500 for such telephonic meetings which are in excess of one hour.
All expenses in connection with attendance at such meetings are paid by the
Company. Also, upon each election or reelection of a non-employee director such
director receives an aggregate of 2,000 restricted shares of Common Stock
pursuant to the Company's 1992 Director Stock Grant Plan, as amended.
13
<PAGE> 16
FUTURE STOCKHOLDER PROPOSALS
The Company must receive at its principal office appearing on the front
page of this Proxy Statement before February 19, 1999, any proposal which a
stockholder wishes to submit to the 1999 Annual Meeting of Stockholders, if the
proposal is to be considered by the Board of Directors for inclusion in the
proxy materials for that annual meeting.
Please return your proxy as soon as possible. Unless a quorum consisting of
a majority of the outstanding shares entitled to vote is represented at the
meeting, no business can be transacted. Therefore, please be sure to date and
sign your proxy exactly as your name appears on your stock certificate and
return it in the enclosed prepaid return envelope. Please act promptly to ensure
that you will be represented at this important meeting.
THE COMPANY WILL PROVIDE WITHOUT CHARGE, ON THE WRITTEN REQUEST OF ANY
BENEFICIAL OWNER OF SHARES ENTITLED TO VOTE AT THE ANNUAL MEETING OF
STOCKHOLDERS, A COPY WITHOUT EXHIBITS OF THE COMPANY'S ANNUAL REPORT ON FORM
10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR
ENDED MARCH 31, 1998. REQUESTS SHOULD BE MAILED TO THE SECRETARY, CATALINA
MARKETING CORPORATION, 11300 9TH STREET NORTH, ST. PETERSBURG, FLORIDA 33716.
THE ANNUAL REPORT ON FORM 10-K IS NOT SOLICITING MATERIAL AND IS NOT
INCORPORATED IN THIS DOCUMENT BY REFERENCE.
By Order of the Board of Directors
/s/ George W. Off
George W. Off
Chief Executive Officer
June 19, 1998
14
<PAGE> 17
APPENDIX
P CATALINA MARKETING CORPORATION
R
O ANNUAL MEETING OF STOCKHOLDERS--JULY 21, 1998
THIS PROXY SOLICITATED ON BEHALF OF THE BOARD OF DIRECTORS
X
The undersigned, having received the Notice of Annual Meeting of
Y Stockholders and the Proxy Statement furnished therewith, hereby appoints
George W. Off and Barry A. Brooks as Proxies, each with the power to appoint
his/her substitute, and hereby authorizes each of them to represent and to
vote, as designated below, all the shares of Common Stock of Catalina
Marketing Corporation (the "Company") held of record by the undersigned on
June 1, 1998, at the Annual Meeting of Stockholders to be held at the
Company's offices, 11300 9th Street North, St. Petersburg, Florida 33716, on
Tuesday, July 21, 1998 and at any adjournment or postponement thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES LISTED BELOW AND FOR EACH
OTHER PROPOSAL LISTED BELOW.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
FOLD AND DETACH HERE
<PAGE> 18
Please mark
your votes as /X/
indicated in
this example.
1. Election of Class I Directors FOR WITHHOLD
Frank H. Barker, Patrick W. Collins and / / / /
George W. Off.
INSTRUCTION: To withhold authority to vote for
an individual nominee, write the nominee's name
in the space provided:
____________________________
2. Proposal to ratify and approve the selection of FOR AGAINST ABSTAIN
Arthur Andersen LLP as the Company's
independent public accountants for fiscal 1999. / / / / / /
3. At their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment or
postponement thereof.
Signature(s)______________________________________________ Date_____________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
FOLD AND DETACH HERE
