|Corporate Governance Guidelines
CORPORATE GOVERNANCE GUIDELINES
On the recommendation of the Nominating and Corporate Governance
Committee, the Board of Directors of Pool Corporation (“Pool”) has adopted the
following guidelines to assist the Board in the exercise of its
responsibilities to Pool and Pool’s shareholders. These Guidelines should be
interpreted in the context of all applicable laws and Pool’s certificate of
incorporation, by-laws and other corporate governance documents, and are
intended to serve as a flexible framework within which the Board may conduct its
business and not as a set of legally binding obligations. These Guidelines are
subject to amendment as the Board may deem appropriate or as required by
applicable laws and regulations.
- Role of
Board and Management.
Pool’s business is conducted by its employees, managers and officers,
under the direction of the chief executive officer (“CEO”) and the
oversight of the Board of Directors, to enhance Pool’s long-term value for
its shareholders. The Board of Directors is elected by shareholders to
provide oversight and strategic guidance to senior management. The core
responsibility of the Board of Directors is to exercise their fiduciary
duty to act in the best interest of Pool and Pool’s shareholders. In
discharging that obligation, the directors should be entitled to rely on
the honesty and integrity of Pool’s senior management and outside advisors
and auditors. The Board of Directors expects each director and each member
of management to act ethically at all times and to adhere to the policies,
as well as the spirit, expressed in Pool’s Code of Business Conduct and
Ethics for Directors, Officers and Employees.
Directors are expected to attend Board meetings and meetings of Committees
on which they serve, to ask questions and engage in discussion, and to
spend the time needed and meet as frequently as necessary to properly
discharge their responsibilities. In carrying out the Board of Director’s
oversight of Pool’s business, the Board and its Committees perform a
number of specific functions, including:
evaluating and compensating the CEO and overseeing CEO succession
and approving long-term strategic plans and annual operating plans, and
monitoring the implementation and execution of those plans;
counsel and oversight on the selection, evaluation, development and
compensation of senior management;
approving and monitoring significant financial and business transactions
and other major corporate actions;
major risks facing Pool and reviewing options for their mitigation;
processes are in place for maintaining Pool’s integrity – the integrity
of the financial statements, the integrity of compliance with law and
ethics, the integrity of relationships with customers and suppliers, and
the integrity of relationships with shareholders;
and approving publicly disclosed financial statements and related
reports, and overseeing the establishment and maintenance of controls,
processes and procedures to ensure accuracy, integrity and clarity in
financial and other disclosures; and
general advice and counsel to the CEO and other members of senior
management in connection with issues arising during the course of
managing Pool’s business. Additionally, Directors shall provide the
Nominating and Corporate Governance Committee with advance notice prior
to any of the following: (1) commencing service on another for profit board
(public or private); (2) commencement of employment with Pool by any
family member of the Director; and (3) providing services or products to
Pool’s independent auditors, such as in the capacity of a vendor,
consultant, contractor, etc., or serving as an officer, director or
significant stockholder of an entity that provides same.
Management, under the direction of the CEO, shall be responsible for
conducting Pool’s business and affairs in an effective, responsible and
ethical manner, consistent with the principles and direction established
by the Board. In carrying out that duty, management is charged with a
number of duties, including the following:
qualified management and implementing an organizational structure that is
efficient and appropriate for Pool’s operations and culture;
long-term strategic plans and annual operating plans, presenting those
plans to the Board, implementing and executing approved plans, and
recommending and executing changes to those plans as necessary;
and managing the risks that Pool undertakes in the course of carrying out
its business and managing Pool’s overall risk profile;
- ensuring the
integrity of Pool’s financial statements and reports by implementing, and
supervising the operation of, systems, controls, processes and procedures
that allow Pool to record, process, summarize and report information in a
timely and accurate manner and produce financial statements and other
disclosures that fairly present Pool’s financial condition and results of
operations and permit shareholders to understand Pool’s business,
financial soundness and risks; and
executive management shall request advance approval from the Nominating
and Corporate Governance Committee prior to commencing service on a
for-profit board (public or private).
Composition. The number
of directors constituting the full Board shall be determined from time to
time by the Board within the limits prescribed by Pool’s certificate of
incorporation and by-laws, as amended. In determining the number of
directors constituting the full Board, the Board should consider, among
other things, the size and breadth of Pool’s business and Pool’s goals and
identifying, evaluating and considering potential candidates for
membership on the Pool’s Board, including those recommended or nominated
by stockholders, the Nominating and Corporate Governance Committee shall
consider relevant educational, business and industry experience and
demonstrated character and judgment. Directors should possess the highest
personal and professional ethics, integrity and values, and be committed
to representing the long-term interests of the shareholders. They must
also have an inquisitive and objective perspective, practical wisdom and
mature judgment. Directors must be willing to devote sufficient time to
carrying out their duties and responsibilities effectively, and should be
committed to serve on the Board for an extended period of time. A majority
of the Board should be comprised of independent directors, as defined by
the applicable provisions of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), the rules promulgated thereunder and the
applicable rules of the Nasdaq Stock Market. It is the responsibility of
each director to ensure that other commitments do not conflict or
materially interfere with the director’s responsibilities to Pool. If a
director has any concerns about whether service as a director of another
company might conflict with his or her duties to Pool, the director should
consult with the Chair of the Nominating and Corporate Governance
Committee prior to accepting an invitation to serve on the other company’s
board. Directors who also serve as CEOs or in equivalent positions should
not serve on the board of more than two other public companies, and other
directors should not serve on the board of more than five other public
Directors are elected each year by the shareholders at the annual meeting
of shareholders. Shareholders may propose nominees for consideration by
the Nominating and Corporate Governance Committee by sending a letter to
the Nominating and Corporate Governance Committee, or may make a
nomination by complying with the notice procedures set forth in Pool’s by-laws,
as amended. The Board proposes a slate of nominees to the shareholders for
election to the Board. Whenever a vacancy occurs in the Board, either
because of a newly-created director position or the removal or retirement
of an existing director, the Board, acting on the recommendations of the
Nominating and Corporate Governance Committee, shall select a person to
fill the vacancy and that person shall serve as a director until the next
annual meeting of shareholders, at which time such person (or another
Board nominee) shall be submitted to the shareholders for election to the
- Term Limits
and Retirement. The
Board recognizes that it is important for the Board to balance the
benefits of continuity with the benefits of fresh view points and experience.
The Board does not believe that it should establish term limits for its
members. While term limits could help insure that there are new ideas and
viewpoints available to the Board, the Board recognizes the value of
continuity of directors who have experience with Pool and who have gained
over a period of time a level of understanding about Pool and its
operations that enable the director to make a significant contribution to
the deliberations of the Board. The Board believes as an alternative to
term limits, it can ensure that the Board continues to evolve and consider
new viewpoints through the Company’s Board evaluation and nomination
process. It is the Company’s policy that a director shall not serve as a
director beyond the end of an elected term during which the director
achieves his or her 75th birthday, provided that the full Board
may unanimously re-nominate a candidate over 75 years of age for another
annual term after thoughtful consideration and based on a director’s
particular contributions, expertise or other circumstances. The existence of a mandatory retirement
age does not mean that the Board believes directors should expect to be
re-nominated annually until they reach 75 years of age. As discussed above, the Board shall
annually conduct its evaluation and nomination process as part of its
Orientation and Education.
Pool’s management shall provide new directors with materials, briefings
and additional education opportunities to permit them to become familiar
with Pool and to enable them to better perform their duties. Board members
are also encouraged to visit Pool facilities and to meet with Pool
employees throughout their tenure on the Board. In addition, Board members
are encouraged to attend accredited director education programs. Pool will
reimburse a director for any out-of-pocket expenses incurred consistent
with Pool’s expense policies in connection with approved director
Committees. The Board
has established the following Committees to assist the Board in
discharging its responsibilities: (i) Audit; (ii) Nominating and Corporate
Governance; (iii) Compensation; and (iv) Strategic Planning. The current
charters and key practices of these Committees are disclosed in Pool’s
most recently filed proxy statement, and will be mailed to shareholders
upon written request. The Committee chairs report the highlights of their
meetings to the full Board following each meeting of the respective
- Meetings of
The Board will have at least four regularly scheduled meetings a year for
the non-employee directors without management present. Generally, these
meetings will be held as “executive sessions,” which shall be a standing
agenda item at each regular meeting of the Board. The non-employee
directors may meet without management present at such other times as
determined by the Lead Independent Director.
Independent Director. If the Chairman of the Board is not an
independent director, the Board shall annually designate a lead
non-employee director (“Lead Independent Director”). The directors Lead Independent Director shall
preside at meetings of non-employee directors and coordinate the
activities of the non-employee directors. The Lead Independent Director
shall, on behalf of the non-employee directors and upon approval of the
requisite number of Board members, assign certain task to the Board’s
Committees. The Lead Independent Director shall advise the Chairman of the
Board and also perform such other functions as the Board may direct,
including: (i) determine the appropriate schedule of Board meetings after
consultation with the Chief Executive Officer (“CEO”), Chairman of the
Board, and other Board members, as necessary; (ii) consult with the CEO,
Chairman of the Board and other Board members on the agenda for the Board,
and oversee the preparation of the agenda; (iii) assess the quality,
quantity, and timeliness of the flow of information from management to the
non-employee directors to ensure that it is sufficient for the
non-employee directors; (iv) direct management to include in the materials
prepared for the Board materials that the Lead Independent Director deems
important; (v) direct the retention of consultants who report directly to
the Board (this does not limit the ability or duty of the Committees of
the Board to retain their own consultants as needed); (vi) coordinate with
the Chairman of the Nominating and Corporate Governance Committee to
oversee compliance with and implementation of corporate governance
policies; (vii) coordinate, develop the agenda for, and moderate executive
sessions of the Board’s non-employee directors, and act as principal liaison
between the non-employee directors and the Chairman of the Board and/or
CEO on sensitive issues; (viii) assist the Chairman of the Compensation
Committee in his evaluation of the CEO’s performance; and (ix) have the
authority to retain such counsel or consultants as the Lead Independent
Director deems necessary to perform his or her responsibilities.
- Self-Evaluation. The Board and each of its Committees
will perform an annual self-evaluation. Each November, the directors will
be requested to provide their assessments of the effectiveness of the
Board and the Committees on which they serve. Thereafter, the individual
assessments will be organized and summarized for discussion with the Board
and the Committees.
Agendas. The Board shall
be responsible for its agenda. Annually, the CEO will propose for the
Board’s approval key issues of strategy, risk and integrity to be
scheduled and discussed during the course of the next calendar year.
Before that meeting, the Board will be invited to offer its suggestions.
As a result of this process a schedule of major discussion items for the
following year will be established. Prior to each Board meeting, the CEO
will discuss the other specific agenda items for the meeting with the
Chairman of the Board and the Lead Independent Director. The CEO, the Lead
Independent Director and the Chairman, or Committee chair as appropriate,
shall determine the nature and extent of information that shall be
provided regularly to the directors before each scheduled Board or
Committee meeting. Directors are urged to make suggestions for agenda items,
or additional pre-meeting materials, to the CEO, the Chairman, the Lead
Independent Director or appropriate Committee chair at any time.
- Number of
Board Meetings and Attendance. The Board shall be responsible for determining the number of
regular meetings to hold each fiscal year, but under no circumstances
shall it have less than four meetings of the full Board in any fiscal
year. Each director is expected to attend all regular meetings of the
Board and of the Committees of which he or she is a member, and is
expected to make every effort to attend any specially called Board or
of the Board. The
Compensation Committee shall have the responsibility for recommending to
the Board compensation and benefits for non-employee directors. In
discharging this duty, the Compensation Committee shall be guided by three
goals: compensation should fairly pay directors for work required in a
company of Pool’s size and scope; compensation should align directors’
interests with the long-term interests of shareholders; and the structure
of the compensation should be simple, transparent and easy for
shareholders to understand. At the end of each year, the Compensation
Committee shall review director compensation and benefits.
- CEO Evaluation
and Succession Planning.
The Compensation Committee shall conduct a review at least annually of the
performance of the CEO. The Compensation Committee shall establish the
evaluation process on which the performance of the CEO is evaluated and
shall seek comments of all independent directors not otherwise serving on
the Committee. As part of the annual CEO evaluation process, the Board
shall work with the CEO to plan for such person’s succession and to
develop plans for interim succession for the CEO in the event of an
- Access to
The Board and its Committees shall have the right at any time to retain
independent outside financial, legal or other advisors.
- Access to
Management. The Board
shall have complete access to all Pool officers and employees. Any
meetings or contacts that a director desires to initiate may be arranged
directly by the director or through the CEO or another executive officer.
The Board welcomes input from management at Board meetings. The Board also
encourages management to identify any personnel who can provide additional
insight into the items being discussed because of personal involvement or
who have potential that management believes should be given exposure to
- Clawback for
Executive Compensation. If the Board determines that any elected
officer’s intentional misconduct, gross negligence, or failure to report
another’s intentional misconduct or gross negligence: (i) was a
contributing factor to Pool having to restate any of its financial
statements filed with the Securities and Exchange Commission; or (ii)
constituted fraud, bribery or other illegal act (or contributed to another
person’s fraud, bribery or other illegal act) which adversely impacted
Pool’s financial position or reputation; then, after consideration of all
facts and circumstances the Board in its sole discretion considers
relevant, the Board may, in its sole discretion, take any actions it deems
necessary or appropriate to address any issues related to the compensation
of that elected officer’s intentional misconduct, gross negligence, or
failure to report another’s intentional misconduct or gross
negligence. Among other things, the
Board may seek to recover or require reimbursement of any incentive
compensation, equity compensation or performance based compensation
awarded to such elected officer.
|Board Committee Charters
|Compensation Committee Charter
COMPENSATION COMMITTEE CHARTER
The purpose of the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) is to carry out the responsibilities delegated by the Board to review and approve or make recommendations to the Board, as set forth in this Charter, regarding compensation and benefits of executive officers, directors and employees of the Company.
The Committee shall be composed of not less than three (3) independent directors. Each member shall qualify as an “outside director” for purposes of Section 162(m) of the Internal Revenue Code, as amended, and as a “non-employee director” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934 (the “Exchange Act”), shall be independent of management, and shall not accept directly or indirectly any consulting, advisory or other compensatory fee from the Company or any subsidiary thereof, consistent with applicable rules and regulations of NASDAQ. The Members of the Committee shall be elected annually by the Board, or as necessary to fill vacancies in the interim. The Chairman of the Committee is elected by the Board or by the majority vote of the Committee members, upon the recommendation of the Nominating and Corporate Governance Committee. In determining whether a director is eligible to serve on the Committee, the Board shall consider all factors relevant to whether the director has a relationship to the company which is material to that director's ability to be independent from management in connection with the duties of a Committee member, including, but not limited to: (i) the source of compensation of such director, including any consulting, advisory or other compensatory fee paid by the Company to such director, and (ii) whether the director is affiliated with the Company, a subsidiary of the Company or an affiliate of a subsidiary of the Company. The members of the Committee shall serve one-year terms or until earlier resignation or death. The Board may remove any member from the Committee at any time with or without cause.
Specific Duties and Responsibilities
The general responsibilities of the Committee are oversight of executive compensation and benefits for the President, and the Executive Officers and other key employees, communications with the full Board, and communications with shareholders through the proxy statement. The Committee shall review annually the Company’s compensation program for its employees in order to oversee management’s implementation of the Company’s goal of maintaining a program that attracts, retains, develops and motivates employees without leading to unnecessary risk taking by employees that would be reasonably likely to have a material adverse effect on the Company. The Committee also has general responsibility for insuring that the Company has in place policies and programs for the development of senior management and senior management succession.
The Committee shall review and make recommendations to the Board with respect to the compensation, including cash and equity-based compensation, of directors.
Stock Plan Administration
The Committee shall review and make recommendations to the Board regarding the adoption of Company incentive plans under which common shares or other equity securities of the Company may be issued. The Committee shall also have full and final authority in connection with the administration of such plans. In furtherance of the foregoing, the Committee shall, in its sole discretion, grant options and make awards of shares under the Company’s stock plans, subject to the provisions of each plan.
Compensation Discussion and Analysis
The Committee shall review and discuss with the Company’s management the Compensation Discussion and Analysis (“CD&A”) and determine whether to recommend to the Board that the CD&A be included in the Company’s proxy statement. The Committee shall also prepare a Compensation Committee Report for inclusion in the Company’s proxy statement, in accordance with applicable rules and regulations of the Securities and Exchange Commission (“SEC”).
Chief Executive Officer (“CEO”) Compensation and Goals
In consultation with the full Board, the Committee shall annually review and approve corporate goals and objectives relevant to CEO compensation, communicate the full Board’s evaluation of the CEO’s performance to the CEO, and determine the CEO’s compensation levels based on this evaluation. In determining the long-term incentive component of CEO compensation, the Committee may consider the Company’s performance and relative shareholder return, the value of similar incentive awards to CEO’s at comparable companies, and the awards given to the CEO in past years. The CEO may not be present during voting or deliberations on his compensation.
Approval of CEO and Executive Officer Compensation and Employment Agreements
The Committee shall annually review and determine for the CEO and the executive officers of the Company: (a) the annual base salary level, (b) the annual incentive opportunity level, (c) the long-term incentive opportunity level, (d) employment agreements, severance arrangements, and change in control agreement/provisions, in each case as, when and if appropriate, and (e) any special or supplemental benefits. In evaluating, making recommendations regarding and approving executive officer compensation, the Committee shall consider the results of the most recent stockholder advisory vote on executive compensation (the “Say-on-Pay Vote”).
The Committee may form and delegate authority to subcommittees when appropriate, provided any action taken by a subcommittee is subsequently reported to the Committee and ratified.
Engaging Consultants; Independence Assessment
The Committee shall have the power, in its sole discretion, to retain or obtain the advice of a compensation consultant, legal counsel or other advisor. The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any advisers retained by the Committee. The Company shall provide for appropriate funding, as determined by the Committee, for payment of appropriate compensation to any adviser retained by the Committee.
Prior to selecting any compensation consultant, legal counsel or other adviser to provide advice to the Committee, and on an annual basis for advisers from whom the Committee obtains advice on a regular basis, the Committee shall make the independence assessment required pursuant to SEC Rule 10C-1(b)(4).
The Committee shall determine whether the work of any compensation consultant has raised any conflict of interest in accordance with Item 407(e)(3) of Regulation S-K of the Securities Act of 1933 and review the proposed disclosure in the Company’s proxy statement of the nature of the conflict and how the conflict, if any, is being addressed. The factors in SEC Rule 10C-1(b)(4) are among the factors that shall be considered in determining whether a conflict of interest exists. Any compensation consultant engaged by the Committee to provide advice regarding the amount or form of executive or director compensation shall not provide additional services to the Company unless approved by the Committee.
Stock Ownership Guidelines
The Committee shall monitor compliance with share ownership guidelines for the CEO and other executive officers.
The Committee shall review the Company’s compensation arrangements to determine whether they encourage excessive risk-taking, to review and discuss at least annually the relationship between risk management policies and practices and compensation, and to evaluate compensation policies and practices that could mitigate any such risk.
To review and recommend to the Board for approval the frequency with which the Company will conduct Say-on-Pay Votes, taking into account the results of the most recent stockholder advisory vote on frequency of Say-on-Pay Votes required by Section 14A of the Exchange Act, and review and approve the proposals regarding the Say on Pay Vote and the frequency of the Say on Pay Vote to be included in the Company's proxy statement.
The Committee shall have authority with respect to and shall be responsible for all other duties as delegated by the Board.
The Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.
The Committee shall conduct an annual evaluation, in such manner as it deems appropriate, of the performance of its duties under this Charter and shall present the results of the evaluation to the Board.
The Committee shall have at least two (2) regularly scheduled meetings but will meet as often as necessary to carry out its responsibilities. Meetings may be called by the Chairman of the Committee and/or the CEO of the Company. The Corporate Secretary will maintain one set of all Committee minutes to be filed as corporate records and will be provided a set of all Committee correspondence. All meetings of the Committee shall be held pursuant to the By-laws of the Company with regard to notice and waiver thereof, and written minutes of each meeting shall be duly filed in the Company records. Reports of meetings of the Committee shall be made to the Board at its next regularly scheduled meeting following the Committee meeting accompanied by any recommendations to the Board approved by the Committee.
Nominating & Corporate Governance Committee Charter
NOMINATING AND CORPORATE
GOVERNANCE COMMITTEE CHARTER
Amended February 2017
Organization and Member Qualifications
The nominating and corporate governance committee shall be comprised of at least three directors appointed by the Board, each of whom shall comply with the independence and other member qualification requirements of NASDAQ and all legal requirements.
Committee Purpose and Authority
The nominating and corporate governance committee's primary purpose is to provide oversight on the broad range of issues surrounding the composition and operation of the Board of Directors, including identifying individuals qualified to become Board members, recommending to the Board director nominees for the next annual meeting of shareholders and recommending to the Board a set of corporate governance principles applicable to the Company. The committee shall recruit, screen, interview and select prospective candidates for Board membership as necessary to fill vacancies or to meet the needs of the Board. The committee also provides assistance to the Board in the areas of committee member selection, evaluation of the overall effectiveness of the Board and committees of the Board, and review and consideration of corporate governance practices.
The committee shall have the sole authority to recommend to the Board candidates for Board membership, unless such authority belongs to a third party under the terms of the Company's Articles of Incorporation, By-laws or any shareholder agreement that allocates the right to nominate directors to a third party.
In meeting its responsibilities, the committee will:
Nomination of Directors
Evaluations of the Board of Directors and Committees of the Board
- Evaluate and identify:
- nominees to fill vacancies on the Board that occur in between meetings of the shareholders; and
- prior to each annual meeting of shareholders, a slate of nominees to be presented for shareholder approval at the annual meeting.
- Consider nominees recommended by shareholders of record who comply with the shareholder nomination procedures established in the By-laws.
- Evaluate the qualifications and performance of each incumbent director prior to the end of his or her term and determine whether to nominate him or her for re-election to the Board.
- Review the Board's committee structure no less than annually and recommend to the Board for its approval the directors to serve as members of each Board committee, keeping in mind the committee independence requirements of NASDAQ and all legal requirements.
- Evaluate no less than annually the appropriateness of the composition and size of the Board of Directors. In carrying out this responsibility, the committee shall consider:
- the director independence requirements of NASDAQ and all legal requirements;
- the collective educational and business experience of the members of the Board;
- the long-term interests of the Company's shareholders; and
- any other criteria deemed relevant by the committee.
- Determine whether at least one member of the Company's audit committee is an "audit committee financial expert," as that term is defined by the SEC.
Evaluate and make recommendations to the full Board regarding the number and accountability of committees of the Board.
- Develop and recommend to the full Board for its approval a set of corporate governance principles. Review the principles no less than annually for the purposes of:
- determining whether the principles are being effectively adhered to and implemented;
- ensuring that the principles are appropriate for the Company and comply with applicable laws, regulations, and NASDAQ listing standards; and
- recommending any desirable changes in the principles to the full Board.
Director Orientation and Continuing Education
Regulatory and Other Requirements
- Develop (i) an orientation program for new directors, including meetings with senior management and visits to Company facilities and (ii) a director continuing education program that complies with any applicable legal or stock exchange continued listing requirements.
- Monitor the continuing education needs of directors with respect to the Company's business, financial statements, corporate governance policies and other appropriate subjects and recommend action to the Board, individual directors and management when appropriate.
- Monitor services unrelated to Board membership provided by non-employee directors to the Company and its subsidiaries.
- Prior to publication, review and approve the "election of directors" section of the Company's proxy statement.
- Review the committee's charter annually and recommend proposed changes to the Board if necessary or advisable.
- Carry out such other duties and responsibilities as may be assigned to the committee from time to time by the Board and/or the Chairman of the Board.
The nominating and corporate governance committee shall meet at least once annually, and more frequently if the committee deems it to be appropriate. The committee shall make regular reports of its activities to the Board. When discussing candidates for nomination, the committee shall meet in executive session.
The committee may delegate authority to one or more members when appropriate, provided that decisions made pursuant to such delegated authority shall be presented to the full committee at its next scheduled meeting.
The committee shall be empowered to retain independent legal counsel, accountants or other advisors, and the Company shall provide for appropriate funding for such advisors. The committee shall have the sole authority to retain and terminate any consulting firm used to identify director candidates.
AUDIT COMMITTEE CHARTER
AUDIT COMMITTEE CHARTER
The Audit Committee assists the Board in monitoring (1) management's process for ensuring the integrity of the financial statements of the Company, (2) the independent auditor's qualifications and independence, (3) the performance of the Company's internal audit function and independent auditors, and (4) management's process for ensuring the compliance by the Company with legal and regulatory requirements.
The Audit Committee prepares the report required by the rules of the Securities and Exchange Commission (the "Commission") to be included in the Company's annual proxy statement.
The Audit Committee shall consist of no fewer than three (3) members. The Board shall appoint the members of the Audit Committee upon recommendation by the Nominating and Corporate Governance Committee. The Board may remove any Committee member from service for any reason in its discretion, including but not limited to a finding that the director is no longer independent. The members of the Audit Committee shall meet the independence and experience requirements of NASDAQ, the United States securities laws, and the rules and regulations of the Commission. At least one (1) member of the Audit Committee shall be a financial expert as defined by the Commission and NASDAQ. Each member must be able to read and understand financial statements, including the Company's balance sheet, income statement and cash flow statement at the time of their appointment.
The Audit Committee shall meet as often as it determines, but not less frequently than quarterly. The Audit Committee shall meet periodically with management, the internal auditors and the independent auditor in separate executive sessions. The Audit Committee may request any officer or employee of the Company, or the Company's outside counsel or independent auditor, to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee.
Committee Authority and Responsibilities
The Audit Committee shall have the sole authority to appoint or replace the independent auditor (subject, if applicable, to shareholder ratification). The Audit Committee shall be directly responsible for the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. The independent auditor shall report directly to the Audit Committee.
The Audit Committee shall pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent auditor, subject to the de minimus exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act, which are approved by the Audit Committee prior to the completion of the audit. The Audit Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Audit Committee at its next scheduled meeting.
The Audit Committee shall have the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting or other advisors. The Company shall provide for appropriate funding, as determined by the Audit Committee, for payment of compensation to the independent auditor for the purpose of rendering or issuing an audit report and to any advisors employed by the Audit Committee.
The Audit Committee shall make regular reports to the Board. The Audit Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval. The Audit Committee shall annually review the Audit Committee's own performance.
The Audit Committee, to the extent it deems necessary or appropriate, shall:
1. Financial Statement and Disclosure Matters
- Review and discuss with management and the independent auditor the annual audited financial statements, including disclosures made in management's discussion and analysis, and recommend to the Board whether the audited financial statements should be included in the Company's Form 10-K.
- Review and discuss with management and the independent auditor the Company's quarterly financial statements prior to the filing of its Form 10-Q, including the results of the independent auditor's review of the quarterly financial statements.
- Quarterly and annually, discuss with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of the Company's financial statements, including any significant changes in the Company's selection or application of accounting principles, any major issues as to the adequacy of the Company's internal controls and any special steps adopted in light of material control deficiencies.
- Review and discuss the annual report from the independent auditor regarding:
(a) All critical accounting policies and practices to be used;
(b)All alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor;
(c)Other material written communications between the independent auditor and management, such as any management letter or schedule of unadjusted differences; and
(d) Critical audit matters once the applicable rules are effective.
- Discuss with management the Company's earnings press releases, including the use of "pro forma" or "adjusted" non-GAAP information, as well as financial information and earnings guidance provided to analysts and rating agencies. Such discussion may be done generally (consisting of discussing the types of information to be disclosed and the types of presentations to be made).
- Discuss with management and the independent auditor the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the Company's financial statements.
- Discuss with management the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company's risk assessment and risk management policies.
- Discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 90 relating to the conduct of the audit, including any difficulties encountered in the course of the audit work, any restrictions on the scope of activities or access to requested information, and any significant disagreements with management.
- Review disclosures made to the Audit Committee by the Company's CEO and CFO, during their certification process for the Form 10-K and Form 10-Q, about any significant deficiencies in the design or operation of internal controls for financial reporting or material weaknesses therein, and any fraud involving management or other employees who have a significant role in the Company's internal controls.
- At least annually, review with management, legal counsel, and the director of internal audit the effectiveness of the Company's disclosure controls and procedures.
- Review and approve the disclosures in each Form 10-K regarding management's annual internal control report and the related attestation report prepared by the Company's independent auditor.
- Establish procedures for resolving disagreements between management and the independent auditor regarding financial reporting.
2. Oversight of the Company's Relationship with the Independent Auditor
- Annually, review and evaluate the lead partner of the independent auditor team.
- Obtain and review a report from the independent auditor at least annually regarding (a) the independent auditor's internal quality-control procedures, (b) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five (5) years respecting one or more independent audits carried out by the firm, (c) any steps taken to deal with any such issues, and (d) all relationships between the independent auditor and the Company, and (e) the independent auditor's registration with the Public Company Accounting Oversight Board. Review the annual written disclosure regarding the independent auditor's independence required by applicable requirements of the Public Company Accounting Oversight Board. Evaluate the qualifications, performance and independence of the independent auditor, including considering whether the auditor's quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditor's independence, and taking into account the opinions of management and internal auditors. The Audit Committee shall present its conclusions with respect to the independent auditor to the Board.
- Recommend to the Board policies for the Company's hiring of employees or former employees of the independent auditor who participated in any capacity in the audit of the Company.
- Require that the independent auditor review and discuss with the audit committee any matters with which they consulted their outside audit team.
- Meet with the independent auditor in a timely manner to discuss the planning and staffing of the audit.
- Confirm that the Company's CEO, CFO, CAO, Controller or equivalent officer, if formerly a partner of or employed by the independent auditor, did not participate in any capacity in the audit of the Company during the one year preceding the date of the initiation of the current audit.
3. Oversight of the Company's Internal Audit Function
- Review the appointment and replacement of the senior internal auditing executive, as needed.
- Quarterly, review the significant reports to management prepared by the internal auditing department and management's responses.
- Annually, discuss with the independent auditor and management the internal audit department responsibilities, budget and staffing and any recommended changes in the planned scope of the internal audit.
4. Compliance Oversight Responsibilities
- Obtain from the independent auditor assurance that Section 10A(b) of the Exchange Act has not been implicated.
- Obtain reports from management that the Company and its subsidiary/foreign affiliated entities are in conformity with applicable legal requirements and the Company's Code of Business Conduct and Ethics. Review reports and disclosures of insider and affiliated party transactions. Advise the Board with respect to the Company's policies and procedures regarding compliance with applicable laws and regulations and with the Company's Code of Business Conduct and Ethics.
- Establish written procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting, internal accounting controls or auditing matters, no later than as required by law or NASDAQ.
- Discuss with management and the independent auditor any correspondence with regulators or governmental agencies and any published reports which raise material issues regarding the Company's financial statements or accounting policies.
- Discuss with the Company's legal counsel legal matters that may have a material impact on the financial statements or the Company's compliance policies.
- Review and approve all "related party transactions" of the type that would be required to be disclosed in the Company's annual proxy statement, regardless of size, and as may otherwise be required by NASDAQ.
- Review the Company's cybersecurity and other information technology risks, controls and procedures, including the Company's plans to mitigate cybersecurity risks and to respond to data breaches and also review with management any specific cybersecurity issues that could affect the adequacy of the Company'
- Prepare the Audit Committee Report required by the Commission to be included in the Company's annual proxy statement and review the disclosure in the proxy statement regarding the independence of the Audit Committee members and the presence of a financial expert on the Audit Committee.
Limitation of Audit Committee's Role
While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company's financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. These are the responsibilities of management and the independent auditor. Management is also responsible for maintaining (i) an appropriate system of internal controls and procedures for financial reporting and (ii) an appropriate system of disclosure controls and procedures, in compliance with applicable law.
STRATEGIC PLANNING COMMITTEE CHARTER
STRATEGIC PLANNING COMMITTEE CHARTER
The Board of Directors (the Board) of Pool Corporation (the Company) has established the Strategic Planning Committee of the Board (the Committee) to assist the Board in fulfilling its responsibilities for evaluating and monitoring the Company's strategic goals as presented by senior management to the Board.
The purpose of the Committee shall be to assist the Board in fulfilling its responsibilities to oversee, evaluate and monitor the strategic planning of the Company, to focus the attention of the Board on long-range objectives for the Company and to review and assess strategies to implement such long-range objectives, by:
- Supporting the Company's executive Management (the "Management") in developing strategic initiatives including long term planning and budgeting;
- Providing Management with guidance and oversight on strategic plan development and execution;
- Monitoring relevant strategic external developments that may have significant impact upon the Company's business;
- Increasing Board focus on issues and recommendations related to the Company's strategic planning process and the execution of such planning;
- Evaluating information the Board receives from Management to assist in making informed decisions regarding the Company's strategic direction;
- Monitoring Company progress and reporting to the Board on its activities, recommendations, and conclusions; and
- Assessing and recommending corporate strategies and issues related to particular areas of focus identified by the Board from time to time.
2. Organization, Composition and Authority.
The Corporate Governance and Nominating Committee shall nominate the Strategic Planning Committee members, which shall be approved by the Board. The Chairperson of the Committee shall be designated by the Board or, if no such designation is made, shall be selected by the affirmative vote of the majority of the Committee. The Chairperson may request the participation of additional board members to support the activities of the Committee on an as needed basis. From time to time, the Committee may utilize paid outside consultants or members of the Board or management to help perform its duties.
The Committee shall operate at the Board level, but shall not assume the Board's governance accountability or make final strategic decisions. The Committee acts solely as an advisor to the Board and Management on current and future strategy-related issues. Management has the responsibility for implementing the Company's strategy after obtaining input and approval from the full Board and other relevant committees.
3. Duties and Responsibilities.
The Committee shall have the following duties and responsibilities:
a. Review Company Strategy: To meet with the Chief Executive Officer and other members of management on at least an annual basis and review management's strategic planning process and the long-range financial and strategic plan of the Company taking into consideration the Company's position within its industry, the general marketplace and such other factors the Committee may deem appropriate;
Provide Resource Support: Support the Board or Management in the evaluation and/or refinement of the Company's strategic plan.
Assess Progress: Review and Assess the status of implementation of the Company's business strategy and whether the results are consistent with the goals of the strategic plan as adopted by the Board.
Recommend Improvements: Recommend areas of improvement and provide feedback to the Board and Management regarding the overall success of the business strategy.
The foregoing list of duties is not intended to be exhaustive, and the Committee may, in addition, perform such other functions as may be necessary or appropriate for the performance of its duties. The Committee may delegate its authority and duties to subcommittees or to individual members, as it deems appropriate in accordance with the authority given by the Board.
4. Charter Review.
The Committee shall review this Charter at least annually and recommend any changes to the Board and share its recommendations with the Nominating and Corporate Governance Committee.
|Code of Business Conduct and Ethics
The policy of Pool Corporation is to comply with all applicable laws and to adhere to the highest ethical standards in the conduct of our business.
Our goal is for Pool Corporation and its worldwide subsidiaries to be known, trusted and respected as one of the best enterprises in the world. To do that requires strong financial and ethical performance. This Code of Business Conduct and Ethics policy (the "Code") provides general principles to follow to ensure that each of its directors, officers and employees act responsibly and maintain the highest standards of personal and professional integrity in all aspects of their daily activity. This Code is designed to promote:
- Compliance with applicable governmental law, rules and regulations;
- Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
- Full, fair, accurate, timely and understandable disclosure in periodic reports and other filings with the Securities and Exchange Commission and in other public communications made by the Company;
- Avoidance of conflicts of interest, including disclosure of any material transaction or relationship that reasonably could be expected to give rise to such conflict;
- The prompt internal reporting of violations of this Code; and
- Accountability for adherence to this Code.
It is each director, officer and/or employee's responsibility to acquire and maintain a working knowledge of the business laws and ethics policies as applicable to their responsibilities with the Company, both by studying this Policy and other materials given to the employee by the Company, and by reading publications and other generally available sources of information about these matters. If a director, officer or employee has a question as to the proper application of this Policy or about what is required by law in any given situation, they should consult with the Company's legal counsel.
1.0 Professional Conduct Our stockholders, customers and other parties with whom we do business have strong views about our Company, and, as its suppliers, we need to promote values and behavior that enhance the Company's reputation within the community. It is imperative that we conduct our professional and business activities with complete integrity, fair dealing and in a manner that inspires the confidence and trust of our stockholders, customers and suppliers.
2.0 Compliance with Laws, Rules and Regulations Obeying the law, both in letter and in spirit, is the foundation on which this Company's ethical standards are built. All directors, officers and employees must respect and obey the laws of the cities, states and countries in which we operate.
3.0 Conflicts of Interest All directors, officers and employees shall conduct their personal business and private affairs so as to avoid any actual or potential conflicts of interest between themselves and the Company and shall take immediate and appropriate action to resolve any conflict of interest which actually arises. A "conflict of interest" arises when one's judgment is or may be influenced by considerations of improper personal gain or benefit. Examples of potential conflicts of interest include, but are not limited to, the following:
Conflicts of interest are prohibited as a matter of Company Policy, except as specifically and expressly approved by the Board of Directors or its designee. Conflicts of interest may not always be easily discernable, so if you have any questions, you should consult with management, the Company's legal counsel and/or refer to the Employee Handbook.
- Investing in any company that sells products or services similar to the Company's, or any company doing or seeking to do business with the Company (other than relatively small investments in securities widely held by the general public);
- Simultaneously working or acting as a consultant or board member for or on behalf of a competitor, customer or supplier;
- Owning, directly or indirectly, an ownership interest in any entity that competes with the Company;
- Placing Company business with relatives or friends, or working on a Company project that will have a direct impact on the financial interests of relatives or friends;
- Receipt of an improper personal benefit or gain as a result of one's position in the Company; and
- Personal relationship with other employees or vendors that affects one's ability to do one's job or disrupts the workplace.
4.0 Insider Trading It is both unethical and illegal to buy, sell, trade or otherwise participate in transactions involving securities of the Company while in possession of material information concerning the Company that has not been released to the general public. Securities laws may be violated if any director, officer, employee, or any of his or her relatives or friends, trade in securities of the Company while in possession of such "inside" information. All non-public information about the Company should be considered confidential "inside" information. Anyone with access to such confidential "inside" information is prohibited from using or sharing such information for stock trading purposes or for any purpose other than to conduct Company business. For additional information, please refer to the Company's "Insider Trading Policy".
5.0 Corporate Opportunities Directors, officers and employees are prohibited from taking for themselves any opportunity that is discovered through the use of corporate property, information or position without the consent of the Board of Directors. No director, officer or employee may use corporate property, information, or position for improper personal gain. Directors, officers and employees owe a duty to the Company to advance its legitimate business interests when the opportunity to do so arises.
6.0 Competition and Fair Dealing We seek to outperform our competition fairly and honestly. We seek competitive advantages through superior performance and never through unethical or illegal business practices. Stealing proprietary information, possessing trade secret information that was obtained without the owner's consent, or inducing such disclosures by past or present employees of other companies is prohibited. Each director, officer and employee should endeavor to respect the rights of and deal fairly with the Company's customers, suppliers, competitors and employees. No unfair advantage should be taken of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair dealing practice.
7.0 Gifts and Entertainment The purpose of business entertainment and gifts in a commercial setting is to create good will and to further working relationships. Any gift that is excessive and has the potential to unduly influence judgment should not be given or accepted. Gifts from suppliers or customers should not be solicited. Moreover, gifts of cash or cash equivalents are prohibited. Non-monetary, unsolicited gifts may not be accepted or given unless:
For additional information, please refer to the Company's "Vendor Free Goods Policy and Procedures."
- The gifts are items of nominal intrinsic value (i.e., meals and refreshments, tickets to sporting events, small holiday gifts, etc.);
- The gifts do not create an express or implied understanding that the recipient is in any way obligated; or
- The gifts are low cost advertising and promotional materials, clearly marked with company or brand names (i.e., company pens, cups, etc.) Employees must report to their supervisor any frequent gifts or offers of gifts received from one source and any offer of a gift, even if not accepted, that appears unusual or excessive.
8.0 Payments to Government Personnel The U.S. Foreign Corrupt Practices Act prohibits the giving of anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business. Illegal payments to government officials of any country are strictly prohibited. In addition, the U.S. government has a number of laws and regulations regarding business gratuities which may be accepted by U.S. government personnel. The promise, offer or delivery to an official or employee of the U.S. government of a gift, favor or other gratuity is a violation of these rules and may not only violate Company policy, but may also be a criminal offense. State and local governments, as well as foreign governments, may have similar rules.
9.0 Discrimination and Harassment The diversity of the Company's employees is a tremendous asset. We are firmly committed to providing equal opportunity in all aspects of employment and will not tolerate any illegal discrimination or harassment of any kind. In addition, retaliation against individuals for raising claims of discrimination or harassment is prohibited.
10.0 Environmental Health and Safety The Company strives to provide a safe and healthy work environment for our employees while protecting the natural environment. Each individual shares the responsibility for maintaining a healthy workplace by following safety practices and reporting accidents, injuries, environmental concerns, unsafe equipment or any other unsafe practices or conditions. Further, misusing controlled substances or selling, manufacturing, distributing, possessing, using or being under the influence of illegal drugs on the job is absolutely prohibited.
11.0 Fair and Accurate Record-Keeping The Company is committed to producing full, fair, accurate, timely and understandable disclosure in reports and documents that it files with, or submits to, the Securities and Exchange Commission and other regulators. Accordingly, the Company requires honest and accurate recording and reporting of information. All of the Company's books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company's transactions and must conform both to applicable legal requirements and to the Company's system of internal controls. By way of example, unrecorded or "off the books" funds or assets should not be maintained, only the true and actual number of hours worked should be reported, and business expense accounts must be documented and recorded accurately. Business records and communications sometimes become public. Accordingly, we should avoid exaggeration, derogatory remarks, guesswork, or inappropriate characterizations of people and companies that may be misunderstood. This applies equally to e-mail, internal memos, and formal reports. Records should always be retained or destroyed according to the Company's record retention policies. Inappropriate access or modifications to, or unauthorized destruction of, accounting or other business records is prohibited. These prohibitions apply to all business records and data, regardless of whether such data and records are in written form or electronically stored.
12.0 Confidentiality Directors, officers and employees of the Company are expected to keep all nonpublic information regarding the Company, its business, employees, customers or suppliers confidential even if their employment with the Company ends. Confidential information may include such things as advertising and marketing plans, business plans, research and development, financial information, employment matters, supplier and customer information, software and documentation, and other information which is not generally known to the public.
13.0 Protection and Proper Use of Company Assets All directors, officers and employees should endeavor to protect the Company's assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the Company's profitability. Any suspected incident of fraud or theft should be immediately reported for proper handling. Company equipment should not be used for non-Company business, though incidental personal use may be permitted.
14.0 Observance of Authority Limits The Company has established an authorization matrix, approved by the Board of Directors, that sets forth specific authority limits for the most common transactions conducted by officers, managers and employees of the Company. All employees are required to observe these limits. Any action that an individual may take beyond the limits of their authority will be deemed to be a violation of this Code and will become the responsibility of the individual, not Pool Corporation. If anyone has questions concerning whether or not he or she is authorized to take a particular action, he or she should refer to the Pool Corporation Delegation of Authority Policies.
15.0 Waivers of the Code of Business Conduct and Ethics Any waiver of this Code may be made only by the Board of Directors or a committee designated by the Board, which will ascertain whether a waiver is appropriate and ensure that the waiver is accompanied by appropriate controls designed to protect the Company. Any waiver concerning a director or executive officer of the Company shall be promptly disclosed to the stockholders by the Company on a Form 8-K, along with the reasons for the waiver.
16.0 Reporting Illegal or Unethical Behavior If you become aware of an ethical issue and/or possible violation of this Code it is your responsibility to promptly report it. It is the policy of the Company not to permit retaliation for an employee's good faith report of questionable behavior and/or misconduct by another. Employees are expected to cooperate in internal investigations of alleged misconduct. The following steps should act as a guide when reporting violations of this Code:
17.0 Compliance Procedures We must all work together to ensure compliance with this Code. In some situations, however, it may be difficult to determine whether certain conduct is improper and unethical. Since every situation that may arise cannot be anticipated, the following steps should act as a guide when faced with difficult questions or problems:
- Discuss the problem with your supervisor. In many cases, your supervisor may be more knowledgeable about the issue and will appreciate being brought into the decision-making process.
- In the rare case where it may not be appropriate to discuss an issue with your supervisor or where you do not feel comfortable approaching your supervisor with your question, discuss it with Human Resources at 985-801- 5139; or
- Make a confidential, anonymous submission regarding the issue through Ethicspoint via the web @ www.ethicspoint.com or the toll-free hotline by calling 866-ETHICSP. Upon receipt of a complaint, Ethicspoint will forward the complaint to the Company's Legal Department, Human Resources Department or Internal Audit Department, as appropriate, for investigation. The Ethicspoint system is completely confidential, easy to use and accessible 24-hours a day from any place in the world.
18.0 Accountability for Adherence to this Code All directors, officers and employees are responsible for reporting any fact or circumstance which they know has resulted or will result in a violation of this Code. The Board of Directors or its designee will determine whether a potential or actual violation exists and will take whatever disciplinary or other action it deems appropriate to protect the Company, including, without limitation, the termination of the individual(s) responsible for the violation. Any violation that concerns a director or executive officer of the Company, could significantly harm the Company's reputation, or may have a material effect on the Company's financial condition will be reported to the Board of Directors as soon as practicable. For further information concerning reporting guidelines please see Section 16 and 17 of this Code.
- Make sure you have all the facts. In order to reach the right solution, we must be as informed as possible.
- Ask yourself: What specifically am I being asked to do? Does it seem unethical or improper? This will enable you to focus on the specific issue you are faced with, and the alternatives that are available. Use your judgment and common sense; if something seems unethical or improper, it probably is.
- Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others involved and discuss the issue.
- Always ask first, act later; if you are unsure of what to do in any situation, seek guidance before you act.
- Report the alleged violation. See Section 16 of this Code.
|Procedures for Pre-Approval of Services by the Company's Independent Audit Firm
All services provided to the Company (including any of its subsidiaries) by the Company's independent audit firm must be pre-approved in the manner described herein.
- Audit Services. The Company's audit committee will, on an annual basis, retain an independent audit firm and pre-approve the scope of all audit services in compliance with applicable law. Unless the audit committee otherwise determines, on an annual basis the committee will also pre-approve the performance by the independent audit firm of the following services related to its audit: reviews of the Company's condensed financial statements included in the Company's Form 10-Qs as required by SEC regulations; review and comment on the Company's Form 10-Q and Form 10-K filings and earnings press releases; audit of any Company benefit plan or retirement plan required to be separately audited; and regulatory audits of the Company's subsidiaries (including, but not limited to, its foreign subsidiaries). The Chair of the audit committee or the full audit committee must pre-approve (i) the independent audit firm's review of registration statements containing the firm's audit report or into which such report is incorporated by reference and the provision of a consent related thereto and (ii) the preparation and delivery of comfort letters in connection with securities offerings. Any pre-approvals by the Chair under this paragraph must be disclosed to the full audit committee at its next meeting.
- Non-Audit Services. The independent audit firm is prohibited from providing any non-audit services unless such service (i) is permitted under all applicable laws and regulations and (ii) is pre-approved as provided below:
All non-audit services must be pre-approved as follows: (1) Once the Company's Chief Financial Officer and the independent audit firm determine that a project is appropriate and permissible, the independent audit firm will send a draft engagement letter to the CFO. (2) The CFO may either: (A) submit the project for pre-approval by the Chair of the audit committee or (B) submit the project for the pre-approval by the full audit committee, either at its next regularly scheduled meeting, at a special meeting, or by unanimous written consent.
Following any pre-approval under this paragraph, the CFO will be responsible for (i) documenting the pre-approval, (ii) arranging for the execution of the related engagement letter and its delivery to the independent audit firm and (iii) keeping copies of the foregoing documents together with the proceedings of the audit committee. (b) At each regularly scheduled meeting of the audit committee, the CFO will advise the committee of (i) the scope and anticipated cost of all projects pre-approved by the Chair since the last meeting and (ii) the cost of all services provided under paragraph (b) above. At each such meeting, the CFO also will provide the audit committee with a projection for the current fiscal year of the estimated fees to be paid by the Company for each service or group of services provided or to be provided by the independent audit firm. (c) The Company will publicly disclose all pre-approvals of non-audit services by its independent audit firm as required by applicable law.
|Insider Trading Policy - ADM-103
|California Transparency In Supply Chains Act Disclosure
|The California Transparency in Supply Chains Act of 2010 requires certain disclosures by certain retail and manufacturing companies doing business in California, pertaining to the disclosing companies' efforts, if any, to address the issues of slavery and human trafficking in their supply chains. Pool Corporation together with its subsidiary and affiliate entities (hereinafter collectively "Pool") is a wholesale distributor of swimming pool, spa and related leisure product merchandise. Notwithstanding, Pool hereby shares this information on the number of steps it takes to further its commitment to fair employment practices and issues pertaining to slavery and human trafficking.
Pool has adopted a Supplier Code of Conduct and requires in its standard terms of purchase that all of its suppliers comply with applicable laws, rules and regulations, including those pertaining to human trafficking and slavery. Pool is in the process of having new and existing suppliers execute and agree to these forms. These documents also allow Pool to conduct audits (either itself or through third parties) to gauge suppliers' compliance with the applicable laws concerning slavery and human trafficking. Any such audits may be either announced or unannounced. Pool does engage in verification of product supply chains by requesting information from its vendors pertaining to issues of human slavery, trafficking and conflict minerals. Pool will not knowingly purchase products from any supplier which Pool has confirmed utilizes slave labor or engages in human trafficking.
Pool requires that all of its supply chain management employees are trained on Pool's Supplier Code of Conduct and the provisions of Pool's standard terms of purchase that address human slavery and trafficking, with such training including the identification of, response to and mitigation of those risks, as well as Pool's corporate position of not knowingly permitting or enabling human slavery and trafficking.
|UK Tax Approach Disclosure
TAX APPROACH – UNITED KINGDOM
FOR THE YEAR ENDED DECEMBER 31, 2020
In accordance with Schedule 19 of the United Kingdom Finance Act 2016, paragraph 19(2), this Tax Strategy sets out the principles that the UK sub-group headed by SCP UK Holdings Limited, incorporated in the United Kingdom, follows to manage its tax affairs.
The policy of Pool Corporation ("Poolcorp") is to comply with all applicable laws and to adhere to the highest ethical standards in the conduct of its business. This also applies to Poolcorp's United Kingdom operations. The goal of Poolcorp and its worldwide subsidiaries is to be known, trusted, and respected as one of the best enterprises in the world.
Management of Tax Risk
Poolcorp considers income taxes one of its critical accounting estimates, and as such, management discusses the topic with the Audit Committee of the Board of the Directors. Management's assessment of Poolcorp's internal controls, including its tax control framework, is certified on an annual basis by the Chief Executive Officer and the Chief Financial Officer.
Poolcorp complies with all tax rules and regulations on a worldwide basis and only engages in tax planning that supports its commercial business activities. Poolcorp adheres to the relevant guidance by the Organisation for Economic Co-operation and Development (OECD) for international tax matters.
Poolcorp aligns its transfer pricing policy with the OECD guidelines as well as the guidelines of the various jurisdictions in which Poolcorp operates. Poolcorp applies the arm's length standard to ensure the parties to intercompany transactions are appropriately remunerated. Consistent with Poolcorp's tax policy, it may seek professional opinions and advice from independent external advisors on tax matters as necessary.
Relationship with Her Majesty's Revenue & Customs (HMRC)
Poolcorp is committed to producing full, fair, accurate, timely, and understandable financial information in its filings with tax authorities. Poolcorp supports all measures to simplify and increase efficiency of the UK tax system and how it is administered.