Document

Exhibit 10.14



POOL CORPORATION
STRATEGIC PLAN INCENTIVE PROGRAM 


ARTICLE I 
PURPOSE OF PROGRAM


Section 1.1     The purpose of the Strategic Plan Incentive Program (the “Program”) is to provide senior management with an additional incentive opportunity to be earned upon the achievement of specified earnings objectives related to the strategic plan for the growth of Pool Corporation (the “Company”). The Program is a cash-based, pay-for-performance program that effectively links the Company’s long-term financial performance with the total cash compensation paid to senior management. The Program serves to complement the Company’s annual bonus program and the longer-term value creation provided by stock option or other equity-based awards. Under the terms of the Program, discussed below, each senior manager is eligible to earn an award either in an amount equal to up to (i) 200% of his or her base salary (“Group I”), (ii) 100% of his or her base salary (“Group II”) or (iii) 50% of his or her base salary (“Group III”) based on the Company’s diluted earnings per share (“EPS”) growth over a three-year period. 


Section 1.2    This updated version of the Program is effective for performance periods beginning on or after January 1, 2021.


ARTICLE II
ADMINISTRATION OF THE PROGRAM


Section 2.1     The Program shall be administered by the Compensation Committee (the “Committee”) of the Board of Directors of the Company. The Committee shall have the sole discretion and authority to administer and interpret the Program.


Section 2.2     Subject to the express provisions and limitations set forth in the Program, the Committee shall be authorized and empowered to do all things necessary or desirable, in its sole discretion, in connection with the administration of the Program, including, without limitation, the following:


(a)    To prescribe, amend and rescind rules and regulations relating to the Program and to define terms not otherwise defined herein;
    
(b)    To determine which persons are eligible to be paid awards and to which of such participants, if any, awards hereunder are actually paid;
    
(c)    To verify the Company’s EPS, as defined herein, and the extent to which the Company has satisfied any other performance goals or other conditions applicable to the payment of awards under the Program;
    
(d)    To prescribe and amend the terms of any agreements or other documents under the Program (which need not be identical);
    
(e)    To determine whether, and the extent to which, adjustments are required pursuant to Article V;
    
(f)    To interpret and construe the Program, any rules and regulations under the Program, and the terms and conditions of any award opportunities provided hereunder, and to make exceptions to any such provisions in good faith and for the benefit of the Company; and
    
(g)    To make all other determinations deemed necessary or advisable for the administration of the Program.


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Exhibit 10.14

ARTICLE III
ELIGIBILITY FOR PARTICIPATION


Section 3.1     The Committee shall, on an annual basis, designate the senior management of the Company who shall participate in the Program for the performance period beginning in that year and identify them as either Group I, Group II, or Group III.


ARTICLE IV
PERFORMANCE CRITERIA


Section 4.1     Program participants shall be entitled to earn an award based upon the Company’s EPS growth at a compounded annual growth rate (“CAGR”) of at least 5% during the performance period. Thus, for example, the performance period for awards to be paid in 2024 shall be from January 1, 2021 through December 31, 2023 and the baseline EPS shall be 2020 EPS, adjusted as provided herein. The maximum payout amounts for Group I shall be 200% of base salary as of the end of the performance period, for Group II shall be 100% of base salary as of the end of the performance period, and for Group III shall be 50% of base salary as of the end of the performance period. 


No award shall be earned or paid unless the CAGR of the threshold EPS baseline established by the Committee is at least 5%.


Section 4.2     A CAGR of EPS of between 5% to 20% of the baseline established by the Committee shall result in a pro rata increase in the award based on the following criteria: (1) Group I: 5% EPS growth rate will result in an award to a participant equal to 50% of the participant’s base salary; 10% EPS growth rate will result in an award to a participant equal to 100% of the participant’s base salary; and a 20% EPS growth rate will result in an award to a participant equal to 200% of the participant’s base salary; (2) Group II: 5% EPS growth rate will result in an award to a participant equal to 25% of the participant’s base salary; 10% EPS growth rate will result in an award to a participant equal to 50% of the participant’s base salary; and a 20% EPS growth rate will result in an award to a participant equal to 100% of the participant’s base salary; and (3) Group III: 5% EPS growth rate will result in an award to a participant equal to 12.5% of the participant’s base salary; 10% EPS growth rate will result in an award to a participant equal to 25% of the participant’s base salary; and a 20% EPS growth rate will result in an award to a participant equal to 50% of the participant’s base salary. 


The following table presents the award opportunities, expressed as a percentage of a participant’s salary, to be earned in the performance period beginning 2021 through 2023, assuming baseline EPS of $8.42, which excludes the $0.15 per diluted share impact of non-cash impairment charges recorded in the first quarter of 2020 and the $0.70 per diluted share benefit of ASU 2016-09 from GAAP diluted EPS of $8.97 at December 31, 2020.  This table is for illustration purposes, and the award opportunities for future performance periods will be based on the applicable baseline EPS. 




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Exhibit 10.14

																					
	Award Opportunities
	CAGR	Ending EPS	Salary % - Group I	Salary % - Group II	Salary % - Group III
	5%	$9.75			50.0%	25.0%	12.5%
	6%	$10.03		60.0%	30.0%	15.0%
	7%	$10.31		70.0%	35.0%	17.5%
	8%	$10.61		80.0%	40.0%	20.0%
	9%	$10.90		90.0%	45.0%	22.5%
	10%	$11.21.		100.0%	50.0%	25.0%
	12%	$11.83		120.0%	60.0%	30.0%
	14%	$12.47		140.0%	70.0%	35.0%
	16%	$13.14		160.0%	80.0%	40.0%
	18%	$13.83		180.0%	90.0%	45.0%
	20%	$14.55		200.0%	100.0%	50.0%






Section 4.3     Within the first 90 days of each performance period, the Committee shall establish in writing the EPS baseline for the performance period, as such baseline may be adjusted pursuant to Section 4.4 below. 


Section 4.4     The term “performance period” shall mean the period for which the award is payable. For calculation of the award, the term “EPS” shall mean the net income per weighted average common share outstanding, assuming dilution, for the performance period. EPS may be adjusted as necessary to reflect the following: acquisition-related charges and/or impact on results; the effects of changes in tax law, changes in accounting principles or other such laws or provisions affecting reported results; major capital restructuring; goodwill and other non-cash impairment charges; and any extraordinary items, including those defined in the Financial Accounting Standards Board Accounting Standards Codification 225-20, Extraordinary and Unusual Items, and/or described in management’s discussion and analysis of financial condition and results of operations appearing in the annual report to stockholders for the applicable year. EPS shall also be adjusted to reflect any other events or changes specified in writing by the Committee, which adjustments will generally be made within the first 90 days of the performance period. 


Section 4.5     An award shall be paid to a participant in cash no later than February 28 following the end of the performance period. Notwithstanding any other provision of the Program to the contrary, no participant shall be entitled to any payment with respect to any award unless the members of the Committee referred to in Section 2.1 hereof shall have certified the payout amount of the awards calculated as provided in this Article IV.


ARTICLE V
AMOUNT OF AWARD


Section 5.1     The maximum award for any Program participant per year shall be $1,500,000. In its sole discretion, the Committee may also reduce an individual’s award calculated under the formula set forth under this Program. In determining the amount of any reduced award, the Committee reserves the right to apply subjective, discretionary criteria to determine a revised amount.






ARTICLE VI
PAYMENT OF AWARD


Section 6.1     The payment of an award for a given performance period requires that the Program participant be on the Company payroll as of the last day of the performance period. The 
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Exhibit 10.14

Committee may make exceptions to this requirement in the case of retirement, death or disability, as determined by the Committee in its sole discretion. 


ARTICLE VII
AMENDMENT AND TERMINATION


Section 7.1     The Board of Directors or the Committee may amend or terminate this Program at any time with respect to future services of participants, and such amendments may include amendments to the EPS targets from those provided herein. 


ARTICLE VIII
TAX WITHHOLDING


Section 8.1     The Company shall have the right to make all payments or distributions pursuant to the Program to a participant, net of any applicable federal, state and local taxes required to be paid or withheld. The Company shall have the right to withhold from wages or other amounts otherwise payable to such participant such withholding taxes as may be required by law, or to otherwise require the participant to pay such withholding taxes. If the participant shall fail to make such tax payments as are required, the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such participant or to take such other action as may be necessary to satisfy such withholding obligations.


ARTICLE IX
NON-ASSIGNABILITY


Section 9.1     Unless the Committee expressly states otherwise, no participant in the Program may sell, assign, convey, gift, pledge or otherwise hypothecate or alienate any award opportunity or amounts determined by the Committee to be payable under the Program, until such amounts (if any) are actually paid.


ARTICLE X
NON-EXCLUSIVITY OF PROGRAM


Section 10.1     The adoption of the Program by the Committee shall not be construed as creating any limitations on the power of the Board of Directors or the Committee to adopt such other compensation arrangements as either may deem desirable, including, without limitation, cash or equity-based compensation arrangements, either tied to performance or otherwise, and any such other arrangements as may be either generally applicable or applicable only in specific cases.


ARTICLE XI
EMPLOYMENT AT WILL


Section 11.1     Neither the Program, selection of a person as a participant in the Program nor the payment of any award to any participant under the Program nor any action by the Board of Directors or the Committee shall be held or construed to confer upon any person any right to be continued in the employ of the Company. The Company expressly reserves the right to discharge any participant whenever in the sole discretion of the Company its interest may so require.


ARTICLE XII
RIGHTS OF PARTICIPANTS


Section 12.1     At no time before the actual payout of an award to any participant under the Program shall any participant accrue any vested interest or right whatsoever under the Program, and the Company has no obligation to treat participants identically under the Program.


Section 12.2     The Program constitutes a mere promise by the Company to make benefit payments in the future and the rights of participants to benefits under this Program shall be solely those of general unsecured creditors of the Company. No participant shall have any interest in any fund or any specific asset of the Company.
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Exhibit 10.14



ARTICLE XIII
GOVERNING LAW


Section 13.1     The Program and any agreements and documents hereunder shall be interpreted and construed in accordance with the laws of the State of Louisiana and applicable federal law. The Committee may provide that any dispute concerning the Program shall be presented and determined in such forum as the Committee may specify, including through binding arbitration.


ARTICLE XIV
DEFERRAL OF AWARDS


Section 14.1     The awards payable hereunder are designed to constitute short-term deferrals that are not subject to the requirements of Section 409A of the Internal Revenue Code of 1986, as amended and the regulations thereunder (“Section 409A”).


Section 14.2     The Company has in effect a Non-Qualified Deferred Compensation Plan (the “Deferred Compensation Plan”) under which certain employees are eligible to defer compensation, including awards granted under this Program. The requirements applicable to such deferrals, including the timing of deferral elections for any award, shall be made in compliance with the terms of the Deferred Compensation Plan and Section 409A.


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