<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:
<PAGE> 2
(Catalina Marketing Corporation Logo)
NOTICE OF ANNUAL MEETING
TO BE HELD ON
JULY 20, 1999
---------------------
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 Hyatt Regency Westfield, 1800 East Golf Road,
Schaumburg, Illinois 60173, on Tuesday, July 20, 1999 at 9:00 AM (the "Annual
Meeting") for the following purposes:
1. To elect two Class II Directors;
2. To ratify and approve the Company's 1999 Stock Option Plan;
3. To ratify and approve the Company's independent public accountants
for fiscal 2000; and
4. 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, 1999 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/DANIEL D. GRANGER
Daniel D. Granger
Chief Executive Officer
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.
St. Petersburg, Florida
June 18, 1999
<PAGE> 3
PROXY STATEMENT
CATALINA MARKETING CORPORATION
11300 9TH STREET NORTH
ST. PETERSBURG, FLORIDA 33716
---------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
JULY 20, 1999
---------------------
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 1999 Annual Meeting of Stockholders to be held on Tuesday,
July 20, 1999 at 9:00 AM at the Hyatt Regency Westfield, 1800 East Golf Road,
Schaumburg, Illinois 60173, and at any and all adjournments or postponements
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, or
by executing a subsequent proxy and presenting it at the meeting. A proxy may
also be revoked by the person who executed the proxy attending the Annual
Meeting and voting in person. 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 18, 1999 to each stockholder of record as of the close of business on
June 1, 1999.
VOTING AT THE MEETING
The Company had 18,574,470 shares of Common Stock, par value $.01 per share
(the "Common Stock"), outstanding as of June 1, 1999. Holders of record of
shares of Common Stock at the close of business on June 1, 1999 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 two nominees
named below under "Nominees for Directors" as the two Class II 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 II Directors. Each Class II Director is to hold office until the 2002
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>
George W. Off..................... 52 Chairman of the Board
Daniel D. Granger................. 50 President, Chief Executive Officer and Director
Joseph P. Port.................... 40 Senior Vice President and Chief Financial Officer
Michael G. Bechtol................ 42 Executive Vice President and President, Catalina
Marketing Services Division ("CMS")
David M. Diamond.................. 40 Executive Vice President and Chief Vision Officer
Michael T. McClorey............... 39 President and Chief Executive Officer, Health
Resource Publishing Company
Laurent Amouyal................... 35 President and Chief Executive Officer, Catalina
Marketing Europe Division
Tommy D. Greer.................... 67 Director, Chairman Emeritus
Frank H. Barker................... 68 Director
Frederick W. Beinecke............. 56 Director
Patrick W. Collins................ 70 Director
Stephen I. D'Agostino............. 65 Director
Thomas W. Smith................... 71 Director
Michael B. Wilson................. 62 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 2001, the terms of Class
II Directors Frederick W. Beinecke, Tommy D. Greer and Thomas W. Smith expire in
1999 and the terms of Class III Directors Stephen I. D'Agostino, Daniel D.
Granger and Michael B. Wilson expire in 2000. Mr. Greer has notified the Company
of his decision not to accept a nomination for election as a director of the
Company at the Annual Meeting and accordingly, the number of authorized
directors in the Company's Bylaws will be reduced to eight (from nine). All
executive officers of the Company are chosen by
2
<PAGE> 5
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, 1999, the Board of Directors held a
total of seven 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.
The standing committees of the Board of Directors are the Compensation
Committee, the Director Grant Plan Committee, the Audit Committee and the
Nominating Committee.
The Compensation Committee, which met on four occasions in fiscal 1999, 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 and its replacement, the
1999 Stock Option Plan, subject, in the latter case, to approval of such plan by
the Stockholders; (b) determining the number of shares subject to options
granted and the exercise price per share; and (c) administering such plans
pursuant to their 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 1999, is
responsible for administering the 1992 Director Grant Plan pursuant to its
terms. The Committee currently consists of Daniel D. Granger and George W. Off.
The Audit Committee, which met on three occasions in fiscal 1999, 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, Thomas W. Smith and Frank H.
Barker, who has served on the Committee since February 1999.
The Nominating Committee, which met on one occasion in fiscal 1999, 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 Frank H. Barker as chairman, who has served on
the Committee since February 1999, Frederick W. Beinecke, George W. Off and
Daniel D. Granger. Stephen I. D'Agostino and Tommy D. Greer served on the
Nominating Committee during fiscal 1999 until February 1999.
The International Committee, which was formed in July 1997, met on two
occasions in fiscal 1999. This Committee was responsible for supervising the
management of and providing oversight for the Company's
3
<PAGE> 6
international operations. The Committee consisted of Frank H. Barker, as
chairman, Helene Monat, former director of the Company, George W. Off and Daniel
D. Granger, and was dissolved in February 1999.
NOMINEES FOR DIRECTORS
The following two persons will be placed in nomination for election to the
Board of Directors as Class II Directors. The shares represented by the proxy
cards returned will be voted FOR the election of these nominees unless otherwise
stated in the proxy.
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.
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.
OTHER DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
George W. Off, one of the Company's founders, became the Chairman of the
Company in July 1998. Prior to becoming Chairman, Mr. Off was the President and
Chief Executive Officer from July 1994 until July 1998, after serving as its
Chief Operating Officer from October 1992 until July 1994 and 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., a Delaware corporation.
Daniel D. Granger became President and Chief Executive Officer of the
Company in July 1998 and has served as a director of the Company since April
1998. Prior to becoming President and Chief Executive Officer, Mr. Granger
served as the Company's President and Chief Operating Officer from April 1998 to
July 1998 and as President of CMS since January 1996 until April 1998. 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, serving as Chief Executive Officer and President of
Catalina Electronic Clearing Services, then an operating unit of the Company.
Joseph P. Port has served as Senior Vice President and Chief Financial
Officer of the Company since April 1999. Prior to joining the Company, Mr. Port
served as Vice President of Finance and Corporate Controller for Kaydon
Corporation, a precision industrial manufacturing company. Prior to his
employment with Kaydon Corporation, Mr. Port was a corporate controller for GATX
Logistics, Inc. Prior to that position, Mr. Port served in various financial and
accounting positions during ten years with Harris Corporation and as a certified
public accountant with KPMG Peat Marwick, LLP.
Michael G. Bechtol has served as Executive Vice President and President of
CMS, an operating unit of the Company, since October 1998. Prior to that, Mr.
Bechtol was the Executive Vice President, Retail, CMS, since April 1998 until
October 1998. In such capacity, Mr. Bechtol directed 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 and Chief Vision
Officer of the Company since October 1998, prior to which he had served as
Executive Vice President, Marketing and New Applications, CMS, since January
1997. Prior to joining the Company, Mr. Diamond was a marketing consultant from
1993 to 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 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.
4
<PAGE> 7
Laurent Amouyal has been President and Chief Executive Officer of Catalina
Marketing Europe, an operating unit of the Company, since its formation in
October 1998. Mr. Amouyal joined the Company in 1993 and served as the President
of Catalina Marketing of France, Inc. prior to his appointment to his present
position.
Tommy D. Greer was the Company's Chairman from 1994 to 1998, after serving
as Chief Executive Officer from January 1992 until July 1994, and 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 Emeritus. Before joining the Company, Mr. Greer had been
retired. Prior to retirement, Mr. Greer spent twenty five 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.
Frank H. Barker, who was elected as a director of the Company in January
1996, served as President and Chief Executive Officer of US Dermatologics, Inc.
from October 1997 until February 1999. He is currently the chairman of the board
of directors of US Dermatologics, Inc. 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 thirty years. Mr. Barker is also a director of Aradigm
Corporation, a corporation engaged in the development of pulmonary drug delivery
systems.
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. Mr. Collins was also a director of
Ralphs Grocery Company from 1988 until March 1994. Prior to his most recent
position, Mr. Collins was the President of Ralphs Grocery Company from February
1976 until March 1994. Mr. Collins is also a director of Bristol Farms, Inc., a
supermarket chain based in South Carolina, and PIA Merchandising Inc., a
merchandising marketing services company.
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, as well as Kyser Industrial Corp., a manufacturer of
certain equipment for trucks and refrigerators for supermarkets and food service
organizations.
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.
5
<PAGE> 8
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 31, 1999, 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. Mr. Port had not joined the Company
as an employee as of such date.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(1)
--------------------
OFFICERS, DIRECTORS AND 5 PERCENT STOCKHOLDERS NUMBER PERCENT
- ------------------------------------------------------------ --------- -------
<S> <C> <C>
T. Rowe Price Associates(2)................................. 2,408,800 13.10%
100 E. Pratt Street
Baltimore, MD 21202
General Electric Company(3)................................. 1,213,965 6.60%
3135 Easton Turnpike
Fairfield, Connecticut 06431
William Blair & Company, L.L.C.............................. 1,172,868 6.38%
222 West Adams Street
Chicago, IL 60606
Frederick W. Beinecke(4).................................... 1,118,800 6.08%
c/o Antaeus Enterprises Inc.
99 Park Avenue, Suite 2200
New York, NY 10016
Antaeus Enterprises, Inc.(4)................................ 1,034,794 5.63%
99 Park Avenue, Suite 2200
New York, NY 10016
Thomas W. Smith(5).......................................... 979,924 5.33%
323 Railroad Avenue
Greenwich, CT 06830
George W. Off............................................... 227,388 1.23%
Daniel D. Granger........................................... 104,952 *
Michael G. Bechtol.......................................... 38,948 *
David M. Diamond............................................ 30,708 *
Frank H. Barker(6).......................................... 0 *
Patrick W. Collins.......................................... 442 *
Stephen I. D'Agostino(7).................................... 82,844 *
Tommy D. Greer.............................................. 129,177 *
Michael B. Wilson........................................... 6,430 *
All directors and executive officers as a group (11
persons).................................................. 2,717,713 14.58%
</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. Off --
120,600, Granger -- 70,000, Bechtol -- 28,150, Diamond -- 28,750 and all
directors and executive officers as a group -- 247,500, all of which options
are exercisable within 60 days of March 31, 1999. The
6
<PAGE> 9
beneficial ownership reported above does not include phantom stock units
(each unit being the non-voting economic equivalent to one share of Common
Stock) held by certain officers and directors of the Company under the
Catalina Marketing Corporation Deferred Compensation Plan as follows:
Messrs. Barker -- 4,773.95 units, Granger -- 45.82 units, Collins -- 4,000
units, D'Agostino -- 1,040.14 units, Off -- 119,771.63 units,
Smith -- 2,793.21 units and Wilson -- 3,196.95 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 advisor 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) These securities are deemed beneficially owned by General Electric Company
("GE"), its subsidiaries General Electric Investment Corporation ("GEIC")
and GE Investment Management Incorporated ("GEIM") and the trustees of the
General Electric Pension Trust. GEIC is a registered investment advisor and
acts as investment manager of the General Electric Pension Trust and as
investment advisor to certain other entities and accounts and thus may be
deemed to share voting or investment authority with respect to shares held
by them. GEIM is a registered investment advisor which acts as investment
advisor for certain entities and accounts and may be deemed to be the
beneficial owner of certain shares owned by such entities or accounts. GE
and its subsidiaries and affiliates expressly disclaim that they are members
of a group. GE further disclaims beneficial ownership of all securities
listed.
(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 ownership to Mr.
Beinecke of the shares held by Antaeus. The shares listed for Mr. Beinecke
include 29,006 shares owned directly by him, 1,034,794 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 1,118,800 shares constituting approximately
6.08% 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,
23,500 held by Mr. Smith's wife and various other family members, with
respect to which he shares voting power, 12,140 shares held in accounts for
Mr. Smith's children over which he has sole voting and investment authority,
and 26,400 shares held by Prescott Investors profit sharing account of which
Mr. Smith is trustee.
(6) Mr. Barker 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.
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 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,
7
<PAGE> 10
directors and 10% stockholders. Except with respect to late filings of Form 3 by
Messrs. Bechtol and Diamond following their being named executive officers of
the Company, 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 1999 STOCK OPTION PLAN
(PROPOSAL 2)
On April 29, 1999, the Board of Directors adopted, subject to the approval
of the Stockholders, the Catalina Marketing Corporation 1999 Stock Option Plan
(the "Option Plan") under which options to purchase the Company's Common Stock
may be granted to such employees and directors of or consultants to the Company
(whether or not they are employees) (collectively, the "Participants" and
individually, a "Participant") as the administrator of the Option Plan (the
"Administrator") may select. The Option Plan will replace the Company's Amended
and Restated 1989 Stock Option Plan, the term of which expired on April 26,
1999. The following is a summary of certain provisions of the Option Plan and is
qualified by reference to the complete plan, a copy of which will be furnished
to any Stockholder upon request.
The affirmative vote of a majority of the outstanding shares present or
represented and entitled to vote at the meeting will be required to approve
Proposal 2. YOUR BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
THE PROPOSAL TO RATIFY AND APPROVE THE COMPANY'S 1999 STOCK OPTION PLAN.
SUMMARY OF THE OPTION PLAN
Purpose. The Board of Directors believes that the Company's Amended and
Restated 1989 Stock Option Plan was and that the Option Plan will continue to be
an important method for the Company to provide incentives to key employees of
the Company and its subsidiaries, to encourage proprietary interest in the
Company and to attract new employees with outstanding qualifications. The Option
Plan is being proposed in order to permit the Board of Directors to continue to
make stock related incentives available to existing and future employees
notwithstanding the expiration of the Amended and Restated 1989 Stock Option
Plan.
Eligibility and Administration. The Option Plan authorizes the
Administrator, which is defined as either the Board of Directors or a committee
of at least three members appointed by the Board of Directors, to select the
Participants who are to be granted options, determine the number of shares of
Common Stock to be granted to each optionee, designate such options as incentive
stock options or nonstatutory stock options and determine to what extent the
options may be transferable. As of the date hereof there are approximately 368
employees eligible to participate under the Option Plan. All directors are
eligible to participate under the Option Plan. The Compensation Committee of the
Board of Directors will initially serve as Administrator of the Option Plan. The
members of the Compensation Committee are Frederick W. Beinecke, as chairman,
Patrick W. Collins and Michael B. Wilson. The Administrator's interpretations
and construction of the Option Plan are final and binding on the Company.
Shares Available for Issuance Under the Option Plan. The aggregate number
of shares of the Company's authorized but unissued or reacquired Common Stock
which may be issued upon exercise of options under the Option Plan shall not
exceed 1,600,000. To date, no options have been granted under the Option Plan.
Under the Amended and Restated 1989 Stock Option Plan, options to purchase an
aggregate of 6,571,464 shares of Common Stock were granted prior to its
expiration, of which, as of June 1, 1999, 1,080,905 had expired or were
forfeited without exercise, 2,902,656 have been exercised and 2,587,903 remain
outstanding.
Grant, Exercise and other Terms of Options. Options issued under the
Option Plan are designated as either incentive stock options or nonstatutory
stock options. Incentive stock options are options meeting the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
nonstatutory options are options not intended to so qualify.
8
<PAGE> 11
The exercise price of options granted under the Option Plan may not be less
than 100% of the fair market value of the Common Stock of the Company (as
defined by the Option Plan) on the date of the grant. With respect to any
Participant who owns stock representing more than 10% of the voting rights of
the outstanding Common Stock of the Company, the exercise price of any incentive
stock option granted must equal at least 110% of the fair market value of the
Common Stock on the grant date, and the maximum term of any such incentive stock
option must not exceed five years.
Options are evidenced by written stock option agreements in a form approved
by the Administrator from time to time and no option is effective until the
applicable stock option agreement has been executed by both parties thereto.
Options granted under the Option Plan may become exercisable in cumulative
increments over a period of months or years, or otherwise, as determined by the
Administrator, provided that no option may become exercisable prior to one (1)
year following the grant thereof. The purchase price shall be paid in cash;
provided, however, that if the applicable option agreement so provides, or the
Administrator, in its sole discretion otherwise approves thereof, the purchase
price may be paid in shares of Common Stock having a fair market value on the
exercise date equal to the exercise price or in any combination of cash and
shares of Common Stock, as long as the sum of the cash so paid and the fair
market value of the shares so surrendered equals the aggregate purchase price.
Optionees who also participate in the Company's Deferred Compensation Plan may
elect, in lieu of receiving shares of Common Stock upon the exercise of
nonstatutory options, to deposit the option profit (the difference between the
aggregate option exercise price and the fair market value of the Common Stock on
the date of exercise) into a phantom stock unit account under the Company's
Deferred Compensation Plan.
No options granted under the Option Plan are exercisable after the
expiration of ten years (or less in the discretion of the Administrator) from
the date of the grant, and no incentive stock options granted under the Option
Plan to a Participant who owns more than ten percent of the total combined
voting power of all classes of outstanding stock of the Company shall be
exercisable after the expiration of five years (or less, in the discretion of
the Administrator) from the date of the grant. The aggregate fair market value
(as of the respective date or dates of grant) of the shares of Common Stock
underlying the incentive stock options that are exercisable for the first time
by an optionee during any calendar year under the Option Plan and all other
similar plans maintained by the Company may not exceed $100,000.
If an optionee ceases to be an employee of the Company for any reason other
than his or her death, Disability or Retirement (as such terms are defined in
the Option Plan), such optionee shall have the right, subject to certain
restrictions, to exercise that option at any time within ninety days (or less,
in the discretion of the Administrator) after cessation of employment, but,
except as otherwise provided in the applicable option agreement, only to the
extent that, at the date of cessation of employee, the optionee's right to
exercise such option had accrued and had not been previously exercised. The
Administrator, in its sole discretion, may provide that the option shall cease
to be exercisable on the date of such cessation if such cessation arises by
reason of termination for Cause (as such term is defined in the Option Plan) or
if the optionee becomes an employee, director or consultant of an entity that
the Administrator determines is in direct competition with the Company.
In the event an optionee dies before such optionee has fully exercised his
or her option, then the option may be exercised in full at any time within
twelve months after the optionee's death by the executor or administrator of his
or her estate or by any person who has acquired the option directly from
optionee by bequest or inheritance, but except as otherwise provided on the
applicable option agreement, only to the extent that, at the date of death, the
optionee's right to exercise such option had accrued pursuant to the terms of
the applicable option agreement and had not been forfeited or previously
exercised.
In the event an optionee ceases to be an employee of the Company by reason
of Disability, such optionee shall have the right, subject to certain
restrictions, to exercise the option at any time within twelve months (or such
shorter period as the Administrator may determine) after such cessation of
employment, but only to the extent that, at the date of cessation of employment,
the optionee's right to exercise such option had previously accrued pursuant to
the terms of the applicable option agreement and had not previously been
exercised.
9
<PAGE> 12
In the event an optionee ceases to be an employee of the Company by reason
of Retirement, such optionee shall have the right, subject to certain
restrictions, to exercise the option at any time within ninety days (or such
longer or shorter period as the Administrator may determine) after cessation of
employment, but only to the extent that, at the date of cessation of employment,
the optionee's right to exercise such option had accrued pursuant to the terms
of the applicable option agreement and had not previously been exercised.
Adjustment of Options Upon Certain Events. If the Company merges with
another corporation and the Company is the surviving corporation in such merger
and under the terms of such merger the shares of Common Stock outstanding
immediately prior to the merger remain outstanding and unchanged, each
outstanding option shall continue to apply to the shares subject thereto and
will also pertain and apply to any additional securities and other property, if
any, to which a holder of the number of shares subject to the option would have
been entitled as a result of the merger.
In the event all or substantially all of the assets of the Company are
sold, the Company engages in a merger where the Company does not survive or the
Company is consolidated with another corporation, each outstanding option will
become exercisable (without regard to the vesting provisions thereof) for a
period of at least 30 days ending five days prior to the effective date of the
transaction or, in its sole discretion, the surviving corporation may (i) grant
to optionees options to purchase shares of the surviving corporation upon
substantially the same terms as the options granted under the Option Plan or
(ii) provide optionees the choice of exercising the option prior to the
consummation of the transaction or receiving a replacement option.
Notwithstanding anything to the contrary and except as otherwise expressly
provided in the applicable stock option agreement, the vesting or similar
installment provisions relating to the exercisability of any option or
replacement option tendered as described in the previous sentence shall be
accelerated and the optionee shall have the right, for a period of at least 30
days, to exercise such option in the event that the optionee's employment with
or services for the Company should terminate within two years following a Change
of Control (as defined in the Option Plan), unless such employment or services
are terminated by the Company for Cause (as defined in the Option Plan) or by
the optionee voluntarily without Good Reason (as defined in the Option Plan), or
such employment or services are terminated due to the death or Disability of the
optionee. Notwithstanding the foregoing, no incentive stock option shall become
exercisable pursuant to the foregoing without the optionee's consent, if the
result would be to cause such option not to be treated as an incentive stock
option.
The number of shares of Common Stock covered by the Option Plan, the number
of shares of Common Stock covered by each outstanding option and the exercise
price thereof shall be proportionately adjusted for any increase or decrease in
the number of issued shares of Common Stock resulting from a subdivision or
consolidation of such shares or a stock split or the payment of a stock dividend
(but only of Common Stock) or any other increase or decrease in the number of
issued shares effective without receipt of consideration by the Company.
Transfer of Options. Unless an option is designated transferable by the
Administrator upon grant, during the lifetime of the optionee, the option shall
be exercisable only by the optionee and shall not be assignable or transferable.
No incentive stock option may be designated as transferable. In the event of the
optionee's death, any nontransferable option shall be transferable by the
optionee by the optionee's will or the laws of descent and distribution.
Amendment and Termination. The Option Plan will continue in effect until
terminated by the Board of Directors or until expiration of the Option Plan on
April 29, 2009. The Board may suspend or discontinue the Option Plan or revise
or amend it, provided that, without the approval of the Company's stockholders,
no such revision or amendment may:
(i) Increase the number of shares of Common Stock which may be issued
under the Plan;
(ii) Change the designation of classes of persons eligible to receive
options under the Option Plan;
(iii) Modify the Option Plan such that it fails to meet the
requirements of Rule 16b-3 of the Securities and Exchange Commission for
the exemption of acquisition, cancellation, expiration or surrender of
options from the operation of Section 16(b) of the Exchange Act; or
10
<PAGE> 13
(iv) Amend the Option Plan to defeat the purpose of the above
restrictions on amendments.
Federal Income Tax Consequences. The following discussion is intended only
as a general summary of the federal income tax consequences to participants and
the Company with respect to the Option Plan. The discussion is based on current
laws which are subject to change at any time or which may be interpreted
differently. The discussion does not address tax consequences under the laws of
any state, local or foreign jurisdiction, nor does it address federal and state
estate, inheritance and gift taxes. Further, the tax treatment of each
Participant will depend in part upon such Participant's particular tax
situation.
The Code provides favorable tax treatment for incentive stock options.
Incentive stock options are subject to certain requirements which are set forth
in the Option Plan. Generally, upon the grant of an incentive stock option, and
upon the exercise of the incentive stock option during employment or within
three months after termination of employment, the optionee will not recognize
any income. However, any appreciation in the value of the shares from the date
of grant through the date of exercise will generally be an item of adjustment in
determining the optionee's potential liability for alternative minimum tax for
the taxable year of exercise. The alternative minimum tax may produce a higher
tax liability than the regular income tax applicable to the optionee.
The sale or disposition of Common Stock purchased upon exercise of an
incentive stock option is generally a taxable event. The optionee will recognize
a gain or loss in an amount equal to the difference between his or her basis
(normally the exercise price) in the Common Stock and the proceeds from the sale
or disposition. If the Common Stock acquired pursuant to an incentive stock
option is not sold or otherwise disposed of within two years from the date of
grant of the incentive stock option and is held for at least one year after
exercise of the incentive stock option (the "Holding Period"), any gain or loss
resulting from the sale or disposition of the Common Stock will be treated as
long term capital gain or loss. If Common Stock acquired upon exercise of an
incentive stock option is disposed of prior to the expiration of the Holding
Period (a "Disqualifying Disposition"), the excess of the fair market value of
the Common Stock on the date of exercise over the exercise price or the excess
of the sale price over the exercise price, whichever is less, will be treated as
ordinary income in the year of disposition. However, any additional gain will be
taxed as capital gain. If an optionee disposes of the Common Stock more than one
year after the date of exercise, such capital gain or loss will be treated as
long term capital gain or loss.
The Company normally is not entitled to a deduction with respect to
incentive stock options. However, in the event of a Disqualifying Disposition,
the Company is entitled to deduct the ordinary income realized by the optionee.
Optionees are required to notify the Company of any Disqualifying Dispositions.
No taxable income will be realized by an optionee upon the grant of a
nonstatutory stock option. Upon exercise of a nonstatutory stock option, the
optionee must recognize as ordinary income the excess of the fair market value
of the Common Stock on the date of exercise over the exercise price. The Company
may deduct this amount provided the Company satisfies the applicable reporting
requirements. An optionee's new basis in the Common Stock acquired upon exercise
of a nonstatutory stock option will generally be the fair market value of the
shares on the date of exercise. Upon a subsequent disposition of such of Common
Stock, the optionee will ordinarily realize a capital gain or loss to the extent
of any intervening appreciation or depreciation. If an optionee disposes of the
Common Stock more than one year after the date of exercise, such capital gain or
loss will be treated as long term capital gain or loss.
11
<PAGE> 14
THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS
(PROPOSAL 3)
The Board of Directors has selected Arthur Andersen LLP to audit the
financial statements of the Company for the year ending March 31, 2000. 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 2000.
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 of Directors are subject to
Board approval.
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
12
<PAGE> 15
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, unless there are other countervailing
factors.
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. Also see, "Committee Decisions
Affecting Chief Executive Officer's Compensation" for a discussion of increases
in Mr. Granger's salary.
Annual Incentive Bonuses
Annual incentive bonuses are awarded to the Company's management under the
annual management incentive plan. Bonuses are set as a target percentage of
salary by management level and are earned based on individual and Company
performance in relation to financial objectives set by the Compensation
Committee and non-financial objectives established by senior management. Bonus
targets range from 16% up to 64% of base salary. Cash payments under the annual
management incentive plan ranged from 9% to 48% of individual employee's base
salary for fiscal 1999, with the exception of Messrs. Bechtol and Diamond, who
had specific, individual performance based incentive plans.
Bonuses paid for fiscal year 1999 were greater than bonuses paid for fiscal
year 1998. The Compensation Committee's aggressive goals for the management of
the Company for fiscal year 1999 were substantially achieved. Examples of the
Company's performance include a 22% increase in revenue and a 24% increase in
earnings per share for fiscal 1999 over the prior year.
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.
On February 17, 1999, the Board, upon a proposal set forth by the
Compensation Committee, approved the grant of 1,133,000 performance vesting
stock options pursuant to the Amended and Restated 1989 Stock Option Plan. A
similar grant relating to 90,000 shares was made to a new member of senior
management on April 26, 1999. The purpose of these grants were to align the
interests of senior management with the interests of the stockholders of the
Company by increasing management's ownership of the Company. The options granted
vest upon the eighth anniversary of the date of the grant; however such options
shall vest earlier if and upon the achievement of certain earnings per share
targets. The Committee believes that such performance vesting options represent
an appropriate means of incentivising senior management. Although the Committee
does not anticipate granting such a large number of performance vesting options
on a regular basis, the
13
<PAGE> 16
Committee will consider additional grants of performance vesting stock options
as it shall deem advisable to further the purpose of aligning the interests of
the Company's management and its stockholders.
COMMITTEE DECISIONS AFFECTING CHIEF EXECUTIVE OFFICER'S COMPENSATION
Effective May 1, 1999, Mr. Granger's base salary was increased by
approximately 15%. Mr. Granger's salary level was determined based on his
performance and contribution to the Company's performance as evaluated by the
Compensation Committee.
Mr. Granger's bonus for fiscal 1999 was determined by the Compensation
Committee based on specific financial and non-financial performance goals. Mr.
Granger's incentive bonus of $192,965 for fiscal 1999, 42% of his salary, was
based upon the Compensation Committee's evaluation of his performance and
contribution to the Company's achievements in 1999, in which increases in
revenue, net income and earnings per share were 22%, 14% and 24%, respectively,
over the prior year. Mr. Granger's annual compensation for fiscal 1999 (salary
paid and bonus earned) was 68% higher than his annual compensation for the prior
year, which included a 33% increase in salary as a result of his promotion to
President and Chief Executive Officer in July 1998.
In addition, the Compensation Committee granted stock options for the
purchase of 345,000 shares to Mr. Granger during fiscal 1999.
Respectfully submitted,
Frederick W. Beinecke
Patrick W. Collins
Michael B. Wilson
14
<PAGE> 17
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)........................... 1999 $418,159 $177,284 32,400 $ 13,879
Chairman of the Board 1998 400,010 137,000 50,000 226,911
(July 1998 to present) 1997 388,375 82,240 50,000 69,396
and Director
Daniel D. Granger(d)....................... 1999 364,243 192,965 345,000 10,981
President and Chief Executive 1998 257,289 75,000 30,000 45,249
Officer (July 1998 to present) 1997 220,000 110,000 50,000 21,633
and Director
Michael G. Bechtol(e)...................... 1999 287,324 320,000 170,000 5,183
Executive Vice President 1998 408,972 102,000 15,000 12,774
and President, CMS 1997 506,466 -- 16,000 14,588
(October 1998 to present)
David M. Diamond(f)........................ 1999 208,762 320,088 173,000 5,219
Executive Vice President and 1998 199,992 226,148 11,000 5,000
Chief Vision Officer 1997 40,768 45,281 50,000 --
(October 1998 to present)
Philip B. Livingston(g).................... 1999 158,204 -- 10,600 331,151
Former Senior Vice President 1998 209,979 60,000 20,000 35,770
and Chief Financial Officer 1997 188,247 65,000 -- 73,491
</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, reimbursement for moving expenses and severance payments. Mr.
Livingston received a severance payment in 1999 of $325,696.
(c) Mr. Off served as President and Chief Executive Officer of the Company from
July 1994 until July 1998.
(d) Mr. Granger served as the President and Chief Operating Officer from April
1998 to July 1998 and as President of CMS from January 1996 until April
1998.
(e) Mr. Bechtol served as the Executive Vice President, Retail, CMS from April
1998 until October 1998 and has been employed by the Company in various
capacities since 1986. Salary includes commissions of $80,000 for 1999,
$208,959 for 1998 and $336,759 for 1997. Mr. Bechtol participated in
specific performance based incentive plans in addition to the annual
management incentive plan.
(f) Mr. Diamond joined the Company in January 1997. Mr. Diamond served as
Executive Vice President, Marketing and New Applications, CMS from January
1997 until October 1998. Mr. Diamond participated in specific performance
based incentive plans in addition to the annual management incentive plan.
(g) Mr. Livingston resigned as Senior Vice President and Chief Financial Officer
in November 1998.
15
<PAGE> 18
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% OF TOTAL
OPTION GRANTED
OPTIONS GRANTED(A) TO EMPLOYEES EXERCISE PRICE($) EXPIRATION DATE
------------------ -------------- ----------------- ---------------
<S> <C> <C> <C> <C>
George W. Off........ 32,400 2.06 52.4375 4/24/03
Daniel D. Granger.... 70,000 4.45 52.4375 4/24/03
275,000 17.47 66.00 2/17/09
Michael G. Bechtol... 10,000 0.64 52.4375 4/24/03
160,000 10.16 66.00 2/17/09
David M. Diamond..... 13,000 0.83 52.4375 4/24/03
160,000 10.16 66.00 2/17/09
Phillip B.
Livingston......... 10,600 0.67 52.4375 4/24/03
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR OPTION
TERM($)(B)
-------------------------------
5% 10%
------------- -------------
<S> <C> <C>
George W. Off........ 469,678 1,037,923
Daniel D. Granger.... 1,014,737 2,242,426
11,414,437 28,926,426
Michael G. Bechtol... 144,962 320,347
6,641,127 16,829,920
David M. Diamond..... 188,451 416,450
6,641,127 16,829,920
Phillip B.
Livingston......... 153,660 339,567
</TABLE>
- ---------------
(a) Options granted prior to February 1999 generally have a term of five years,
and become exercisable at the rate of 25% per year, commencing one year
after the date of grant, except for options associated with a new hire
which generally have a term of six years, become exercisable at the rate of
20% per year, and are subject to early termination in certain instances
relating to termination of employment. Options granted in February 1999
have a term of ten years and become exercisable on the eighth anniversary
of the date of grant provided that such options will become exercisable
prior to such date upon achievement of certain earnings per share targets
by the Company.
(b) Potential Realizable Value is based on the assumption that the market price
of the stock appreciates at the stated rate, compounded annually, from the
date of grant to the expiration of the option. These values are calculated
based on requirements promulgated by the Securities and Exchange Commission
and do not reflect the Company's estimate of future stock price
appreciation.
OPTION EXERCISES AND YEAR END VALUE TABLE
<TABLE>
<CAPTION>
AT FISCAL YEAR END
---------------------------------------------------------
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS($)(B)
ACQUIRED ON VALUE --------------------------- ---------------------------
EXERCISE(A) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
George W. Off(c).................. 8,953 688,292 75,000 107,400 4,281,250 5,295,875
Daniel D. Granger(d).............. 16,397 1,543,150 32,500 392,500 1,628,125 10,334,375
Michael G. Bechtol................ 8,500 333,656 15,850 191,300 859,275 4,695,013
David M. Diamond.................. -- -- 22,750 211,250 812,500 5,080,938
Phillip B. Livingston(e).......... 23,040 592,352 3,920 -- 236,670 --
</TABLE>
- ---------------
(a) The number of shares acquired is net of shares which were withheld to pay
taxes or to pay the exercise price and does not reflect shares the receipt
of which was deferred pursuant to the Company's Deferred Compensation Plan,
which are now held as phantom units. To acquire the shares listed, Messrs.
Off, Granger and Livingston exercised options to purchase 40,000, 31,748
and 17,303 shares, respectively.
(b) The closing price of the Company's Common Stock was $85.875 per share on
March 31, 1999, the last business day of the fiscal year.
(c) Mr. Off exercised options to purchase 40,000 shares of the Company's Common
Stock of which 12,539.55 shares were withheld for payment of the exercise
price, 1,367.19 shares were withheld for payment of taxes and 8,953.00
shares were issued to Mr. Off. Receipt of the remaining 17,140.26 shares
were deferred under the Company's Deferred Compensation Plan and are held
as phantom units.
(d) Mr. Granger exercised options to purchase 31,748 shares of the Company's
Common Stock of which 8,438 shares were withheld for payment of the
exercise price, 6,913 were withheld for the payment of taxes and 16,397
were issued to Mr. Granger.
(e) Mr. Livingston exercised options to purchase 42,055 shares of the Company's
Common Stock of which 8,928.74 shares were withheld for payment of the
exercise price, 146.25 shares were withheld for payment of taxes and
23,040.00 shares were issued to Mr. Livingston. Receipt of the remaining
9,940.01 shares were deferred under the Company's Deferred Compensation
Plan and are held as phantom units.
16
<PAGE> 19
COMMON STOCK PRICE PERFORMANCE GRAPH
The following graph compares the Company's cumulative total return to
stockholders since March 31, 1994 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(1).
<TABLE>
<CAPTION>
CATALINA NYSE MKT
MEASUREMENT PERIOD MARKETING VALUATION PEER GROUP
(FISCAL YEAR COVERED) CORP. INDEX INDEX
<S> <C> <C> <C>
3/31/94 100 100 100
3/31/95 109 111 118
3/31/96 172 145 138
3/31/97 171 169 163
3/31/98 231 246 280
3/31/99 377 264 195
</TABLE>
Assumes $100 invested on March 31, 1994, in Catalina Marketing Corporation
at a closing price of $22.75 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.
17
<PAGE> 20
FUTURE STOCKHOLDER PROPOSALS
The Company must receive at its principal office appearing on the front
page of this Proxy Statement before February 18, 2000, any proposal which a
Stockholder wishes to submit to the 2000 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, 1999. 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/DANIEL D. GRANGER
Daniel D. Granger
Chief Executive Officer
June 18, 1999
18
<PAGE> 21
APPENDIX
P CATALINA MARKETING CORPORATION
R
O ANNUAL MEETING OF STOCKHOLDERS--JULY 20, 1999
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
Daniel D. Granger 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, 1999, at the Annual Meeting of Stockholders to be held at
the Hyatt Regency Westfield, 1800 East Golf Road, Schaumburg, Illinois
60173, on Tuesday, July 20, 1999 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> 22
Please mark
your votes as /X/
indicated in
this example.
1. Election of Class II Directors FOR WITHHOLD
Frederick W. Beinecke / / / /
and Thomas W. Smith.
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 FOR AGAINST ABSTAIN
1999 Stock Option Plan / / / / / /
3. Proposal to ratify and approve the selection of FOR AGAINST ABSTAIN
Arthur Andersen LLP as the Company's
independent public accountants for fiscal 2000. / / / / / /
4. 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
