Employment Agreement

Amendment to Employment Agreement

Change in Control Agreement

 

 

LOGO

March 3, 2004

 

Mr. L. Dick Buell

 

Dear Dick:

 

This letter sets forth all of the terms of our offer to you for employment. I am pleased to offer you the position on our executive team for Catalina Marketing Corporation (“Catalina”) as the Chief Executive Officer. You will be based at our corporate headquarters in St. Petersburg, Florida. Your duties and responsibilities will include the general supervision, direction and control of the business and implementation of the employer’s business plan, subject to the control of the Board of Directors and to such supervisory powers, if any, as may be given by the Board of Directors to the Chairman of the Board. You will have such general powers, duties and authority usually vested in the office of the Chief Executive Officer of a corporation and shall have such other powers, duties and authority consistent with the foregoing as may be prescribed by the Board of Directors. I will nominate you for membership on the Catalina Board of Directors with the expectation that you would serve on the Board as long as you are Chief Executive Officer of Catalina.

 

We expect that you will start employment on Wednesday, March 17, 2004. You will initially receive a base salary of $21,153.85 per pay period, payable bi-weekly. Your base salary as in effect from time to time will not be decreased. Performance will be reviewed annually and may influence future compensation. There will be an interim review of your initial performance and base salary level in December 2004.

 

In addition to the base salary set forth above, you will be eligible to participate in an annual bonus program provided for senior management of Catalina. This eligibility will commence with fiscal year 2005 starting on April 1, 2004. Payout of any earned bonus would take place within 60 days of the conclusion of the annual fiscal period. Your initial target bonus level is 100% of your annual base compensation. The amount of money available for payout against this bonus target is earned on the basis of company performance against established business objectives. Your actual award may be adjusted based on your individual performance in providing leadership to obtain those objectives as determined by the Board of Directors. Under this current management bonus program, actual awards can vary from zero to 150% of your target bonus level. The business objectives beginning with fiscal year 2006 shall be established in writing before the start of the fiscal year, and in consultation with the Chief Executive Officer.

 

We will also recommend, subject to final Board of Directors’ approval, that the Board of Directors grant you a Stock Option to purchase 225,000 shares of common stock at the then stated fair market value determined at a meeting of the Compensation Committee after the FY03 audit has been concluded and the financials have been published. The option will vest over 4 years at 25% per year, with the vesting schedule beginning on March 17, 2004. I am also pleased to inform you that you will be eligible for consideration for allocations of additional equity which could be in the form of stock options or stock units or some combination of the two and that the review for award consideration is usually made once a year following the annual meeting of shareholders.

 

You will be eligible for relocation reimbursement within the first 12 months of employment. Reimbursement will only be made for actual incurred expenses that are eligible within our relocation guidelines and within the stated time period. Taxable relocation expenses will be grossed up. Such expenses could include (if needed by you) assistance with home sale costs, home purchase costs,


LOGO

 

transportation of household goods and 2 cars, and a house-hunting trip for your family up to a maximum of actual incurred costs of $50,000. In addition, we will reimburse you for actual reasonable incurred costs for temporary living during the first 6 months of employment for short-term housing and food expenses. All temporary living and relocation costs are reimbursable to Catalina by you should you voluntarily leave employment with Catalina within 18 months after the initial date of your employment.

 

You will participate in Catalina’s health insurance benefits effective May 1, 2004. Catalina will reimburse you for actual health insurance premium expenses to maintain your current insurance for you and your wife from your initial start date through May 1, 2004. May 1, 2004 is also the effective date for participation in the other welfare benefits such as Life Insurance, LTD, STD, as well as for starting employee contributions to our 401k. Company match to the 401k begins the first quarter after one year of employment. The Human Resources Department will review your benefits program with you and answer any questions. In addition, you will be entitled to receive twenty (20) days vacation per year. Vacation will accrue at a rate of 6.15 hours per pay period. You will remain at this level of vacation benefit until the normal company policy would provide a higher benefit. Normal company carryover policy limitations will apply.

 

Catalina will reimburse you for actual incurred financial planning and/or tax preparation expenses up to $5,000 annually. Catalina will reimburse you one time for actual estate planning advice expenses up to $15,000. We will also reimburse you for actual costs, not reimbursed by health insurance, for annual physical examinations at a clinic of your choosing in the United States, up to a maximum of $4,000 annually. Other benefits such as life insurance will be provided in the same manner and under the same conditions as they are provided to other employees from time to time. The current value of life insurance provided to you will be $500,000. Any imputed taxable income is your responsibility. Additional life insurance may be purchased at your expense. In addition, Catalina will reimburse you for the reasonable cost of one country club membership (includes initiation fee and monthly dues and expenses) in a club which allows use in support of Catalina’s business.

 

Should you be terminated by the Board of Directors of Catalina without cause prior to April 6, 2006 Catalina will provide you 18 months of base salary compensation, either in a lump sum payment or by salary continuation, at the discretion of Catalina, upon execution of a release satisfactory to Catalina against all claims against Catalina, its officers, and Board of Directors. To be eligible to receive and retain this compensation, you will also have to fulfill all obligations in your Confidentiality Agreement, including the Covenant Not to Compete and Agreement Not to Disparage the Company. Should you be terminated by the Board of Directors of Catalina “for cause” at any time, no separation benefits will be provided. The definition of “for cause” includes but is not exclusively limited to conviction of a felony or plea of guilty or no contest to a felony, actions against the company that disparage, harm, or injure the company in a material way, violation of the employee Confidentiality Agreement, material violations of stated company policy, becoming mentally or physically incapable of performing the duties of the position, or failure to adequately perform the duties of your position, not cured within 30 days after written notification. Termination “for cause” also includes engaging in any conduct that constitutes fraud or, gross negligence or gross misconduct that results in material harm to Catalina. In addition, we are providing you with a separate Change of Control agreement, a form of the agreement is attached hereto. This Change of Control agreement terminates April 6, 2006 and defines the separation benefits that apply under Change of Control.

 

As a condition of employment, you are required to execute a Confidentiality Agreement; a form of the agreement is attached hereto. This Confidentiality Agreement covers a wide range of topics that include your affirmation that there are no terms for your length of employment and that you have no conflicts with regards to former employers in fulfilling the responsibilities of this position. You also will commit to protect confidential information forever and not to engage in activities competitive with the scope of Catalina’s current operations or logical future operations during your tenure. You also agree not to solicit Catalina employees for alternate employment or business arrangements within two years of leaving the company. You also agree not to compete directly or indirectly with Catalina for two years after leaving the company.


 

LOGO

You will devote your full time and efforts during working hours to the performance of the duties of Chief Executive Officer and will render your services solely and exclusively to Catalina, using your best efforts to advance the interests of the business. Participation on the board of directors of a “for profit” business requires approval by the Nominating and Corporate Governance Committee of the Board of Directors. Our policy limits participation to one board. However, your current participation on two such boards will be given consideration by that Committee.

 

Your co-signature on this offer letter and your execution of the Change of Control Agreement and the Confidentiality Agreement are required for employment. On your first day of work, you will need to furnish identification to verify your right to work in the United States.

 

Catalina is a drug free workplace. All employees are required to submit to a urinalysis at a laboratory chosen by Catalina within two business days after accepting an offer of employment. A Chain of Custody form and instructions on the drug testing procedures will be provided to you by the Human Resources Department under separate mailing. This offer of employment is contingent upon our receiving a negative drug test result and by your co-signature on this offer letter you release Catalina and any of its subsidiaries from any liability which may result from the drug test process.

 

Please fax a signed copy of all three documents to Ed Buck, Senior Vice President of Human Resources for Catalina Marketing at fax number [xxxx]. An original should also be forwarded to Ed’s attention at 200 Carillon Parkway, St Petersburg, Florida 33716. Please call Ed (phone number is [xxxx]) before sending the fax.

 

This offer is valid for five business days from the receipt of this letter.

 

Dick, on behalf of Catalina Marketing Corporation, the Board of Directors, and the executive team, we look forward to you joining Catalina and to a return of the growth characteristics that have generated value for our shareholders in the past.

 

 

 

 

 

 

Sincerely,

  

ACCEPTANCE:

 

 

 

 

 

 

  

 

 

/s/ L. Dick Buell


 

  

 

 

L. Dick Buell

 

 

 

Frederick W. Beinecke

Chairman of the Board, Catalina Marketing

  

 

 

3-12-04


  

 

 

Date

 

 

 

 

Cc:

 

Mike O’Brien, Interim CEO

 

 

Ed Buck, SVP, Human Resources

 

 

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Amendment

LOGO

 

October 26, 2004

 

L. Dick Buell

 

Dear Dick:

 

I reference the letter (the “Original Letter”) written by me, as Chairman of the Board of Directors of Catalina Marketing Corporation (“Catalina”), to you, dated March 3, 2004. The Original Letter spelled out the terms and conditions of your employment arrangement with Catalina as Chief Executive Officer, which commenced March 17, 2004. The purpose of this letter is to amend the Original Letter as set forth below. When accepted by you in the manner stated below, this letter shall constitute an amendment to the Original Letter, and will be binding on you and Catalina, as follows:

 

The fifth full paragraph of the Original Letter is hereby amended to read in its entirety as follows:

 

You will be eligible for reimbursement of relocation expenses incurred in accordance with our Relocation Assistance Guidelines (the “Guidelines”) as modified by the balance of this paragraph. You will be eligible for reimbursement of “Transition” expenses described in the Guidelines incurred during the first seven months of your employment and for “Personal Property” and “Housing” expenses described in the Guidelines for the period commencing the first day of your employment through October 31, 2005. Taxable reimbursements under this paragraph will be grossed up. All relocation costs described or referenced in this paragraph are reimbursable to Catalina by you should you voluntarily leave employment with Catalina within eighteen months after the initial date of your employment.

 

Except as set forth in this letter, the Original Letter shall remain in full force and effect without change.

 

Sincerely,

 

 

/s/ Frederick W. Beinecke


Frederick W. Beinecke

Chairman of the Board

Catalina Marketing Corporation

 

 

ACCEPTED:

 

/s/ L. Dick Buell


L. Dick Buell

 

Date: 10.29.04

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                                CHANGE OF CONTROL
                               SEVERANCE AGREEMENT
 
<PAGE>
 
                                CHANGE OF CONTROL
                               SEVERANCE AGREEMENT
 
      This Agreement between [NAME] ("you") and Catalina Marketing Corporation
(the "Company") has been entered into as of [DATE]. This Agreement promises you
severance benefits if, following a Change in Control, you are terminated without
Cause or resign for Good Reason as set forth in this Agreement. Capitalized
terms are defined in the last section of this Agreement.
 
1.    PURPOSE
 
      The Company considers a sound and vital management team to be essential.
Management personnel who become concerned about the possibility that the Company
may undergo a Change in Control may terminate employment or become distracted.
Accordingly, the Board has determined that appropriate steps should be taken to
minimize the distraction executives may suffer from the possibility of a Change
in Control. One step is to enter into this Agreement with you.
 
2.    YOUR AGREEMENT
 
      If one or more Potential Changes in Control occur during the Term of this
Agreement, you agree not to resign for at least six full calendar months after a
Potential Change in Control occurs, except as follows: (a) you may resign if you
are given Good Reason to do so; and (b) you may terminate employment on account
of retirement on or after achieving age 65 or because you become unable to work
due to serious illness or injury. This Agreement is not an employment agreement
and does not affect the right of the Company to terminate you for any reason or
no reason, with or without cause, and does not affect the right of the Company
to change the conditions of your employment or your title, authority or
responsibilities.
 
3.    EVENTS THAT TRIGGER SEVERANCE BENEFITS
 
(a)   Termination After a Change in Control
 
      You will receive Severance Benefits under this Agreement if, within two
years after a Change in Control has occurred (so long as such Change in Control
occurs during the Term of this Agreement), your employment is terminated by the
Company without Cause or you resign for Good Reason.
 
(b)   Termination After a Potential Change in Control
 
      You also will receive Severance Benefits under this Agreement if, during
the Term of this Agreement and after a Potential Change in Control has occurred
but before a Change in Control actually occurs, your employment is terminated by
the Company without Cause or you resign for Good Reason.
 
(c)   Successor Fails to Assume This Agreement
 
<PAGE>
 
      You also will receive Severance Benefits under this Agreement if, during
the Term of this Agreement, a successor to the Company fails to assume this
Agreement, as provided in Section 12(a).
 
4.    EVENTS THAT DO NOT TRIGGER SEVERANCE BENEFITS
 
      You will not be entitled to Severance Benefits if your employment ends
because you are terminated for Cause or on account of Disability or because you
resign without Good Reason, retire or die. Except as provided in Section 3(c),
you will not be entitled to Severance Benefits while you remain protected by
this Agreement and remain employed by the Company, its affiliates or their
successors.
 
5.    TERMINATION PROCEDURES
 
      If you are terminated by the Company within two years after a Change in
Control occurring during the Term of this Agreement, the Company shall provide
you with 30 days' advance written notice of your termination. Advance notice
will not be required if you are being terminated for Cause. In any case, the
notice will indicate why you are being terminated and will set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
your termination. If you are being terminated for Cause, your notice of
termination will include a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the entire membership of the Board (at a
meeting of the Board called and held for the purpose of considering your
termination (after reasonable notice to you and an opportunity for you and your
counsel to be heard before the Board)) finding that, in the good faith opinion
of the Board, Cause for your termination exists and specifying the basis for
that opinion in detail. If you are purportedly terminated without the notice
required by this Section, your termination shall not be effective.
 
6.    SEVERANCE BENEFITS
 
(a)   In General
 
      If you become entitled to Severance Benefits under this Agreement, you
will receive all of the Severance Benefits described in this Section.
 
(b)   Lump-Sum Payment in Lieu of Future Compensation
 
      In lieu of any further cash compensation for periods after your employment
ends and in lieu of any other severance or other similar compensation to which
you might be entitled under the Company's policies, or otherwise, you will be
paid a cash lump sum equal to [AMOUNT] times your Annual Compensation in effect
when your employment ends or, if higher, the highest Annual Compensation in
effect immediately before the Change in Control, Potential Change in Control, or
Good Reason event for which you terminate employment.
 
                                      -2-
<PAGE>
 
(c)   Incentive Compensation
 
      The Company will pay you a cash lump sum equal to the sum of any unpaid
incentive compensation (that is not otherwise paid to you) that you have been
allocated or awarded under any bonus or commission plan for measuring periods
completed before you became entitled to Severance Benefits under this Agreement.
 
(d)   Deferred Compensation; Stock Benefits
 
      The Severance Benefits and other terms set forth on this Agreement will
not affect your rights under any deferred compensation, savings, retirement,
"401(k)," stock purchase, stock option or other employee benefit or compensation
plan, all of which will be governed by the terms thereof. You are reminded that
the Company's stock option plans contain provisions which are effective in
connection with a Change in Control.
 
(e)   Group Insurance Benefit Continuation
 
      During the period that begins when you become entitled to Severance
Benefits under this Agreement and ends on the last day of the 30th calendar
month beginning thereafter, the Company shall provide the life, disability,
accident and health insurance benefits (or substantially similar benefits) it
was providing to you and your spouse and dependents immediately before you
became entitled to Severance Benefits under this Agreement (or immediately
before a benefit reduction that constitutes Good Reason, if you terminate
employment for that Good Reason). These benefits shall be treated as satisfying
the Company's COBRA obligations. After benefit continuation under this
subsection ends, you and your spouse and dependents will be entitled to any
remaining COBRA rights.
 
(f)   Withholdings
 
      The Company will be entitled to withhold from your Severance Payments an
amount or amounts it is required to withhold under applicable law.
 
7.    TIME FOR PAYMENT
 
      You will be paid your cash Severance Benefits within five days after you
become entitled to Severance Benefits under this Agreement (e.g., within five
days following your termination of employment). If the amount you are due cannot
be finally determined within that period, you will receive the minimum amount to
which you are clearly entitled, as estimated in good faith by the Company. The
Company will pay the balance you are due (together with interest at the rate
provided in Code Section 1274(b)(2)(B)) as soon as the amount can be determined,
but in no event later than 30 days after you terminate employment. If your
estimated payment exceeds the amount you are due, the excess will be a loan to
you, which you must repay to the Company within five business days after demand
by the Company (together with interest at the rate provided in Code Section
1274(b)(2)(B)).
 
                                      -3-
<PAGE>
 
8.    PAYMENT EXPLANATION
 
      When payments are made to you, the Company will provide you with a written
statement explaining how your payments were calculated and the basis for the
calculations. This statement will include any opinions or other advice the
Company has received from auditors or consultants as to the calculation of your
benefits.
 
9.    RELATION TO OTHER SEVERANCE PROGRAMS
 
      Your Severance Benefits under this Agreement are in lieu of any severance
or similar benefits that may be payable to you under any other employment
agreement or other arrangement, or in accordance with the Company's published or
unpublished policies; to the extent any such benefits are paid to you, they
shall be applied to reduce the amount due under this Agreement. This Agreement
constitutes the entire agreement between you and the Company and its affiliates
with respect to such benefits.
 
10.   POTENTIAL LIMITATIONS
 
(a)   Golden Parachute
 
      Your aggregate payments and benefits under this Agreement may exceed the
relevant limitations under the "golden parachute" provisions of Code Section
280G. However, nothing in this Agreement shall cause the Company to be required
to pay to you any amount in excess of the Severance Benefits provided for
herein.
 
(b)   Pooling of Interests Transaction
 
      If the Company enters into a business combination transaction that is
intended to qualify for "pooling of interests" accounting treatment and the
transaction would qualify for such treatment but for one or more provisions of
this or any other agreement you have with the Company, then such agreement, to
the extent practicable, shall be interpreted so as to permit such accounting
treatment. All determinations under this Section shall be made by the accounting
firm whose pooling of interests accounting opinion is required as a condition of
the consummation of the business combination transaction in question.
 
11.   EFFECT OF REEMPLOYMENT
 
      Your Severance Benefits will not be reduced by any other compensation you
earn or could have earned from another source.
 
12.   SUCCESSORS
 
(a)   Assumption Required
 
                                      -4-
<PAGE>
 
      In addition to obligations imposed by law on a successor to the Company,
during the Term of this Agreement the Company will require any successor to all
or substantially all of the business or assets of the Company, including in
connection with any Change in Control transaction (whether by sale of assets or
securities, or merger transaction, or otherwise) expressly to assume and to
agree to perform this Agreement in the same manner and to the same extent that
the Company was required to perform. If the Company fails to obtain such an
assumption and agreement before the effective date of a succession, you will be
entitled to Severance Benefits as if you were terminated by the Company without
Cause on the effective date of that succession.
 
(b)   Heirs and Assigns
 
      This Agreement will inure to the benefit of, and be enforceable by, your
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If you die while any amount is still
payable to you under this Agreement, that amount will be paid to the executor,
personal representative or administrator of your estate.
 
13.   AMENDMENTS
 
      This Agreement may be modified only by a written agreement executed by you
and an authorized officer of the Company.
 
14.   GOVERNING LAW
 
      This Agreement creates a "top hat" employee benefit plan subject to the
Employee Retirement Income Security Act of 1974, and it shall be interpreted,
administered, and enforced in accordance with that law; the Company is the "plan
administrator." To the extent that state law is applicable, the statutes and
common law of the State of Florida (excluding its choice of laws statutes or
common law) shall apply.
 
15.   CLAIMS
 
(a)   When Required; Attorneys' Fees
 
      You do not need to present a formal claim to receive benefits payable
under this Agreement. However, if you believe that your rights under this
Agreement are being violated, you must file a formal claim with the Company in
accordance with the procedures set forth in this Section. If the claim cannot be
resolved under these administrative procedures, the Company will pay your
reasonable attorneys' fees and related costs in enforcing your rights under this
Agreement if you ultimately prevail.
 
(b)   Initial Claim
 
      Your claim must be presented to the Company in writing. Within 90 days
after receiving the claim, a claims official appointed by the Company will
consider your claim and issue his or her determination thereon in writing. The
claims official may extend the determination period for up to an additional 90
days by giving you written notice. With your consent, the initial claim
determination period can be extended further. If you can
 
                                      -5-
<PAGE>
 
establish that the claims official failed to respond to your claim in a timely
manner, you may treat the claim as having been denied by the claims official.
 
(c)   Claim Decision
 
      If your claim is granted, the benefits or relief you are seeking will be
provided. If your claim is wholly or partially denied, the claims official
shall, within 90 days (or a longer period, as described above), provide you with
written notice of the denial, setting forth, in a manner calculated to be
understood by you: (i) the specific reason or reasons for the denial; (ii)
specific references to the provisions on which the denial is based; (iii) a
description of any additional material or information necessary for you to
perfect your claim, together with an explanation of why the material or
information is necessary; and (iv) an explanation of the procedures for
appealing denied claims. If you establish that the claims official has failed to
respond to your claim in a timely manner, you may treat the claim as having been
denied by the claims official.
 
(d)   Appeal of Denied Claims
 
      You may appeal the claims official's denial of your claim in writing to an
appeals official designated by the Company (which may be a person, committee, or
other entity) for a full and fair appeal. You must appeal a denied claim within
60 days after your receipt of written notice denying your claim, or within 60
days after such written notice was due, if the written notice was not sent. In
connection with the appeals proceeding, you (or your duly authorized
representative) may review pertinent documents and may submit issues and
comments in writing. You may only present evidence and theories during the
appeal that you presented during the initial claims stage, except for
information the claims official requested you to provide to perfect the claim.
You will irrevocably waive any theories you do not in good faith pursue through
the appeal stage, such as by failing to file a timely appeal request.
 
(e)   Appeal Decision
 
      The decision by the appeals official will be made within 60 days after
your appeal request, unless special circumstances require an extension of time,
in which case the decision will be rendered as soon as possible, but not later
than 120 days after your appeal request, unless you agree to a greater extension
of that deadline. The appeal decision will be in writing, set forth in a manner
calculated to be understood by you; it will include specific reasons for the
decision, as well as specific references to the pertinent provisions of this
Agreement on which the decision is based. If you do not receive the appeal
decision by the date it is due, you may deem your appeal to have been denied.
 
(f)   Procedures
 
      The Company will adopt procedures by which initial claims and appeals will
be considered and resolved; different procedures may be established for
different claims. All procedures will be designed to afford you full and fair
consideration of your claim.
 
                                      -6-
<PAGE>
 
16.   VALIDITY
 
      The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
 
17.   COUNTERPARTS
 
      This Agreement may be executed in several counterparts, each of which will
be deemed an original, but all of which will constitute one and the same
instrument.
 
18.   GIVING NOTICE
 
(a)   To the Company
 
      All communications from you to the Company relating to this Agreement must
be sent to the Company to its principal business office in St. Petersburg,
Florida, in writing, by registered or certified mail, or delivered personally,
or as the Company may otherwise notify you in writing.
 
(b)   To You
 
      All communications from the Company to you relating to this Agreement must
be sent to you in writing, by registered or certified mail, or delivered
personally, addressed as indicated at the end of this Agreement, or as you may
otherwise notify the Company in writing.
 
19.   DEFINITIONS
 
(a)   Agreement
 
      "Agreement" means this contract, as amended.
 
(b)   Annual Compensation
 
      "Annual Compensation" means your base salary in effect plus the greater of
(i) the average bonus and commissions paid to you in respect of the three fiscal
years preceding the year in which the Change in Control took place (or in
respect of such lesser number of years during which you were employed by the
Company prior to the fiscal year during which the Change in Control took place)
or (ii) the bonus and commissions paid to you in respect of the fiscal year
during which the Change in Control took place or, if greater, any subsequent
fiscal year.
 
(c)   Beneficial Owner
 
      "Beneficial Owner" has the meaning set forth in Rule 13d-3 under the
Exchange Act.
 
(d)   Board
 
      "Board" means the Board of Directors of the Company.
 
                                      -7-
<PAGE>
 
(e)   Cause
 
      "Cause" means the dishonesty, fraud, misconduct, unauthorized use or
disclosure of confidential information or trade secrets, conviction or
confession of a crime punishable by law (except misdemeanor violations), or
engaging in practices contrary to stock "insider trading" policies of the
Company, by you in each case as determined by the Board, with such determination
to be conclusive and binding on persons.
 
(f)   Change in Control
 
      "Change in Control" means the occurrence of any of the following: (i) the
acquisition, directly or indirectly, by any individual or entity or group (as
such term is used in Section 13(d)(3) of the Exchange Act) of Beneficial
Ownership (except that such individual or entity shall be deemed to be the
Beneficial Owner of all shares that any such individual or entity has the right
to acquire without the happening or failure to happen of a material condition or
contingency, other than the passage of time) of more than 50% of the aggregate
outstanding voting power of capital stock of the Company in respect of the
general power to elect directors; (ii) during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board
(together with individuals elected to the Board with the approval of at least 66
2/3% of the directors of the Company then still in office who were either
directors at the beginning of such period, or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board then in office; and (iii) (A) the Company consolidates
with or merges into another entity or sells all or substantially all of its
assets to any individual or entity, or (B) any corporation consolidates with or
merges into the Company, which in either event (A) or (B) is pursuant to a
transaction in which the holders of the Company's voting capital stock in
respect of the general power to elect directors immediately prior to such
transaction do not own, immediately following such transaction, at least a
majority of the voting capital stock in respect of the general power to elect
directors of the surviving corporation or the person or entity which owns the
assets so sold.
 
(g)   Code
 
      "Code" means the Internal Revenue Code of 1986, as amended.
 
(h)   Company
 
      "Company" means Catalina Marketing Corporation and any successor to its
business or assets that (by operation of law, or otherwise) assumes and agrees
to perform this Agreement. However, for purposes of determining whether a Change
in Control has occurred in connection with such a succession, the successor
shall not be considered to be the Company.
 
(i)   Disability
 
      "Disability" means that, due to physical or mental illness: (i) you have
been absent from the full-time performance of your duties with the Company for
substantially all of a period of six consecutive months; (ii) the Company has
notified you that it intends to
 
                                      -8-
<PAGE>
 
terminate you on account of Disability; and (iii) you do not resume the
full-time performance of your duties within 30 days after receiving notice of
your intended termination on account of Disability.
 
(j)   Exchange Act
 
      "Exchange Act" means the Securities Exchange Act of 1934, as amended.
 
(k)   Good Reason
 
      "Good Reason" means the occurrence of any of the following without your
express written consent:
 
            (1)   A change in your status, title, position or responsibilities
(including reporting responsibilities) that represents a substantial reduction
of the status, title, position or responsibilities in respect of the Company's
business as in effect immediately prior thereto; the assignment to you of
substantial duties or responsibilities that are inconsistent with such status,
title, position or responsibilities; or your removal from or failure to
reappoint or reelect you to any of such positions, except in connection with the
termination of the your employment for Cause, for Disability or as a result of
your death, or by you other than for Good Reason;
 
            (2)   A reduction in your annual base salary;
 
            (3)   The Company requiring you to be based at any place outside a
35-mile radius of your place of employment immediately prior to a Change in
Control, except for reasonably required travel on the Company's business that is
not materially greater than such travel requirements prior to such Change in
Control; or
 
            (4)   The Company's failure to (i) continue in effect any material
compensation or benefit plan (or a reasonable replacement therefore) in which
you were participating immediately prior to a Change in Control or (ii) provide
you with compensation and benefits at least equal (in terms of benefit levels
and/or reward opportunities) to those provided for under each employee benefit
plan, program and practice as in effect immediately prior to a Change in Control
(or an in effect following the Change in Control, if greater).
 
However, an event that is or would constitute Good Reason shall cease to be Good
Reason if: (a) you do not terminate employment within 45 days after the event
occurs; or (b) the Company reverses the action or cures the default that
constitutes Good Reason before you terminate employment; or (c) you were a
primary instigator of the Good Reason event and the circumstances make it
inappropriate for you to receive benefits under this Agreement (e.g., you agree
temporarily to relinquish your position on the occurrence of a merger
transaction you negotiate). If you have Good Reason to terminate employment, you
may do so even if you are on a leave of absence due to physical or mental
illness or any other reason.
 
(l)   Person
 
                                      -9-
<PAGE>
 
      "Person" has the meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Section 13(d) of that Act, and shall include a "group," as
defined in Rule 13d-5 promulgated thereunder. However, a Person shall not
include: (i) the Company or any of its subsidiaries; (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
any of its subsidiaries; (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities; or (iv) a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company.
 
(m)   Potential Change in Control
 
      "Potential Change in Control" means that any of the following has occurred
during the term of this Agreement and no event terminating the following has
occurred:
 
      (1)   Agreement Signed. The Company enters into an agreement that will
            result in a Change in Control.
 
      (2)   Notice of Intent to Seek Change in Control. The Company or any
            Person publicly announces an intention to take or to consider taking
            actions that will result in a Change in Control.
 
      (3)   Board Declaration. With respect to this Agreement, the Board adopts
            a resolution declaring that a Potential Change in Control has
            occurred.
 
(n)   Severance Benefits
 
      "Severance Benefits" means your benefits under Section 6 of this
Agreement.
 
(o)   Term of this Agreement
 
      "Term of this Agreement" means the period that commences on the date of
this Agreement and ends on April 6, 2006.
 
IN WITNESS WHEREOF, the parties have executed this Agreement as if the date set
forth above.
 
                                    CATALINA MARKETING CORPORATION
 
                                    By:_________________________________________
                                    Name:  Frederick W. Beinecke
                                    Title: Chairman of the Board
 
                                      -10-
<PAGE>
 
                                    [NAME]
 
                                    ____________________________________________
 
Company notices to you shall be addressed as follows (or in any other manner you
notify the Company to use):
 
                                              [NAME]____________________________
 
                                              [ADDRESS 1]_______________________
 
                                              [ADDRESS 2]_______________________
 
                                      -11-
<PAGE>
 
                                TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                                                   Page
                                                                                   ----
<S>                                                                                <C>
1.      Purpose.................................................................     1
2.      Your Agreement..........................................................     1
3.      Events That Trigger Severance Benefits..................................     1
        (a)       Termination After a Change in Control.........................     1
        (b)       Termination After a Potential Change in Control...............     1
        (c)       Successor Fails to Assume This Agreement......................     2
4.      Events That Do Not Trigger Severance Benefits...........................     2
5.      Termination Procedures..................................................     2
6.      Severance Benefits......................................................     2
        (a)       In General....................................................     2
        (b)       Lump-Sum Payment in Lieu of Future Compensation...............     2
        (c)       Incentive Compensation........................................     3
        (d)       Deferred Compensation; Stock Benefits.........................     3
        (e)       Group Insurance Benefit Continuation..........................     3
        (f)       Withholdings..................................................     3
7.      Time for Payment........................................................     3
8.      Payment Explanation.....................................................     4
9.      Relation to Other Severance Programs....................................     4
10.     Potential Limitations...................................................     4
        (a)       Golden Parachute..............................................     4
        (b)       Pooling of Interests Transaction..............................     4
11.     Effect of Reemployment..................................................     4
12.     Successors..............................................................     4
        (a)       Assumption Required...........................................     4
        (b)       Heirs and Assigns.............................................     5
13.     Amendments..............................................................     5
14.     Governing Law...........................................................     5
15.     Claims..................................................................     5
        (a)       When Required; Attorneys' Fees................................     5
        (b)       Initial Claim.................................................     5
        (c)       Claim Decision................................................     6
        (d)       Appeal of Denied Claims.......................................     6
        (e)       Appeal Decision...............................................     6
        (f)       Procedures....................................................     6
16.     Validity................................................................     6
17.     Counterparts............................................................     7
18.     Giving Notice...........................................................     7
        (a)       To the Company................................................     7
        (b)       To You........................................................     7
19.     Definitions.............................................................     7
        (a)       Agreement.....................................................     7
        (b)       Annual Compensation...........................................     7
        (c)       Beneficial Owner..............................................     7
        (d)       Board.........................................................     7
        (e)       Cause.........................................................     8
</TABLE>
 
                                       -i-
<PAGE>
 
<TABLE>
<S>                                                                                 <C>
        (f)       Change in Control.............................................     8
        (g)       Code..........................................................     8
        (h)       Company.......................................................     8
        (i)       Disability....................................................     8
        (j)       Exchange Act..................................................     9
        (k)       Good Reason...................................................     9
        (l)       Person........................................................    10
        (m)       Potential Change in Control...................................    10
                  (1)       Agreement Signed....................................    10
                  (2)       Notice of Intent to Seek Change in Control..........    10
                  (3)       Board Declaration...................................    10
        (n)       Severance Benefits............................................    10
        (o)       Term of this Agreement........................................    10
                  (1)       Expiration..........................................    10
                  (2)       Change in Control...................................    10
</TABLE>
 
                                      -ii-
<PAGE>
 
                                      -iii-
 

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