<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
SCP Pool Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
SCP POOL CORPORATION
109 NORTHPARK BOULEVARD
COVINGTON, LOUISIANA 70433-5001
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
SCP Pool Corporation (the "Company"), which will be held on Wednesday, May 7,
1997, at 9:00 a.m., CST, at the Company's corporate offices located at
109 Northpark Blvd., Covington, Louisiana 70433.
The Notice of Meeting, Proxy Statement, Proxy Form and Annual Report of the
Company are included with this letter. The matters listed in the Notice of
Meeting are more fully described in the Proxy Statement.
It is important that your shares are represented and voted at the Annual
Meeting, regardless of the size of your holdings. Accordingly, please mark,
sign and date the enclosed Proxy and return it promptly in the enclosed
envelope. If you attend the Annual Meeting, you may, of course, withdraw your
proxy should you wish to vote in person.
Sincerely,
/s/ WILSON B. SEXTON
------------------------
Wilson B. Sexton
Chairman and Director
<PAGE>
SCP POOL CORPORATION
109 NORTHPARK BOULEVARD
COVINGTON, LOUISIANA 70433-5001
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of SCP Pool Corporation (the "Company")
will be held on Wednesday, May 7, 1997, at 9:00 a.m., local time, at the
Company's corporate offices located at 109 Northpark Blvd., Covington, Louisiana
70433 to consider and take action with respect to the following matters:
1. The election of six directors to hold office for a term of one year or
until their successors have been elected and qualified;
2. The ratification of the appointment of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending December 31,
1997; and
3. The transaction of such other business as may properly come before the
Annual Meeting and any adjournments or postponements thereof.
Holders of record of the Company's Common Stock at the close of business on
March 18, 1997 are entitled to receive notice of and to vote on all matters
presented at the Annual Meeting and at any adjournments or postponements
thereof. A list of such stockholders will be available for examination by any
stockholder for any purpose germane to the meeting during normal business hours
at the Company's principal executive offices, 109 Northpark Boulevard,
Covington, Louisiana 70433-5001, and at the location of the meeting set forth
above, in each case for a period of 10 days prior to the meeting.
By Order of the Board of Directors
/s/ WILSON B. SEXTON
----------------------------------
Wilson B. Sexton
Chairman and Director
April 11, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON AND REGARDLESS OF
THE NUMBER OF SHARES YOU OWN, PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY AND
MAIL IT PROMPTLY IN THE ENVELOPE PROVIDED TO ENSURE THAT YOUR SHARES WILL BE
REPRESENTED. YOUR PROXY IS REVOCABLE AT ANY TIME BEFORE IT IS VOTED OR BY
DELIVERY OF A LATER-DATED PROXY. IN ANY EVENT YOU MAY VOTE IN PERSON IF YOU
ATTEND THE ANNUAL MEETING.
<PAGE>
SCP POOL CORPORATION
109 NORTHPARK BOULEVARD
COVINGTON, LOUISIANA 70433-5001
PROXY STATEMENT
Annual Meeting of Stockholders
to be held on
May 7, 1997
This proxy statement (the "Proxy Statement") is being furnished to the
holders of common stock, par value $0.001 per share (the "Common Stock") of SCP
Pool Corporation (the "Company") in connection with the solicitation of proxies
by and on behalf of the Board of Directors of the Company (the "Board of
Directors" or the "Board") for use at the annual meeting of stockholders to be
held on May 7, 1997 at 9:00 a.m., CST, and at any adjournments or postponements
thereof (the "Annual Meeting"). These proxy materials are being mailed in the
package with this Proxy Statement on or about April 11, 1997 to holders of
record of the Common Stock at the close of business on March 18, 1997.
If the enclosed Proxy Form is properly signed, dated and returned to the
Company, the individuals identified as proxies thereon will vote the shares
represented by the Proxy Form in accordance with the directions noted thereon.
If no direction is indicated, the proxies will vote FOR the election of the six
nominees named herein as directors and FOR the ratification of the appointment
of Ernst & Young LLP as the Company's independent auditors for the 1997 fiscal
year. The Company's management does not know of any matters other than those
discussed in this Proxy Statement that will be presented at the Annual Meeting.
If other matters are presented, all proxies will be voted in accordance with the
recommendations of the Company's management.
Returning your completed Proxy Form will not prevent you from voting in
person at the Annual Meeting if you are present and wish to vote. In addition,
you may revoke your proxy any time before it is voted by written notice to the
Secretary of the Company prior to the Annual Meeting at the Company's principal
executive offices at the address above or by submission of a later-dated proxy.
Each outstanding share of Common Stock entitles the holder thereof to one
vote on each matter to come before the Annual Meeting. As of March 18, 1997,
there were 4,223,829 shares of Common Stock outstanding. The presence in person
or by proxy of a majority of the shares of Common Stock outstanding will
constitute a quorum for the transaction of business. Under Delaware law,
abstentions are treated as present and entitled to vote, and therefore will be
counted in determining the existence of a quorum and will have the effect of a
vote against any matter requiring the affirmative vote of a majority of the
shares present and entitled to vote at the Annual
<PAGE>
Meeting. Under Delaware law, broker "non-votes" are considered present but not
entitled to vote, and thus will be counted in determining the existence of a
quorum but will not be counted in determining whether a matter requiring
approval of a majority of the shares present and entitled to vote has been
approved or whether a plurality of the vote of the shares present and entitled
to vote has been cast.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's by-laws provide that the size of the Board shall be fixed
from time to time by resolution of the Board and that vacancies on the Board may
be filled by the remaining directors. The Board size is currently fixed at six
directors. Four directors have been serving since the time of the Company's
registration under the Securities Act of 1933 of the initial public offering
(the "IPO") of its Common Stock. Two additional independent directors have been
appointed since the consummation of the IPO.
The Board currently consists of Wilson B. Sexton, Frank J. St. Romain,
Andrew W. Code, Peter M. Gotsch, Dominick DeMichele and Robert C. Sledd. Each
director is elected to serve for the remaining term of any vacancy filled by the
director or for a one-year term (if elected at an annual meeting of
stockholders) or until a successor is duly elected.
Wilson B. Sexton, Frank J. St. Romain, Andrew W. Code, Peter M. Gotsch,
Dominick DeMichele and Robert C. Sledd have been nominated for re-election at
the Annual Meeting. The Company has no reason to believe that the nominees
named herein will be unavailable to serve as directors. However, if the
nominees for any reason are unable to serve or for good cause will not serve,
the proxy may be voted for such substitute nominees as the persons appointed in
the proxy may in their discretion determine.
Directors will be elected at the annual meeting by a plurality of the votes
cast at the meeting by the holders of shares represented in person or by proxy.
There is no cumulative voting as to any matter, including the election of
directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, upon recommendation of its Audit Committee, has
selected the accounting firm of Ernst & Young LLP to serve as independent
auditors of the Company with respect to the 1997 fiscal year to audit the
financial statements of the Company for the fiscal year ending December 31, 1997
and to perform other appropriate accounting services.
2
<PAGE>
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting to respond to questions and to make a statement if they desire to
do so. If the stockholders do not ratify this appointment by the affirmative
vote of a majority of the shares represented in person or by proxy at the Annual
Meeting, other independent auditors will be considered by the Board of Directors
upon recommendation by the Audit Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE APPOINTMENT
OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR FISCAL YEAR 1997.
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The following sets forth certain information concerning the Company's
executive officers and directors. Officers of the Company serve at the
discretion of the Board of Directors.
WILSON B. SEXTON AGE: 60
Mr. Sexton has served as Chairman and a director of the Company and South
Central Pool Supply, Inc. ("SCP Supply") since December 1993, and served as a
consultant to Lake Villa Corporation (formerly known as South Central Pool
Supply, Inc.), a Louisiana corporation (the "Predecessor") from 1988 to
December 1993. Mr. Sexton was self-employed from 1980 to 1988. Mr. Sexton
served as a director of and held a number of positions with Airwick
Industries, Inc. from 1974 to 1980, including President of the Airwick Pool
Products division and Vice President of Airwick Industries, Inc. From 1958 to
1974, Mr. Sexton was employed by Seablue Corporation, a swimming pool
equipment and supplies manufacturer, where he served as President from 1972 to
1974.
FRANK J. ST. ROMAIN AGE: 61
Mr. St. Romain has served as President, Chief Executive Officer and a director
of the Company and SCP Supply since December 1993 and held the same positions
with the Predecessor since its founding in 1980. Prior to 1980, Mr. St. Romain
had 21 years experience in the pool business and held a number of positions
with Seablue Corporation and Airwick Pool Products.
ANDREW W. CODE AGE: 38
Mr. Code has served as a director of the Company since December 1993, and
served as a Vice President of the Company and SCP Supply from December 1993 to
May 1995. Mr. Code has since August 1988 been a general partner of CHS
Management Limited Partnership ("CHS Management"), the general partner of Code
Hennessy & Simmons Limited Partnership ("CHS"). Mr. Code was a Vice President
of Citicorp Savings, a commercial bank, from 1986 until August 1988.
3
<PAGE>
PETER M. GOTSCH AGE: 32
Mr. Gotsch has served as a director of the Company since December 1993 and
served as a Vice President of the Company and SCP Supply from December 1993 to
May 1995. Mr. Gotsch has been a Managing Director of Code, Hennessy & Simmons,
Inc., an affiliate of CHS, since January 1996, was a Vice President of CHS
Management from June 1994 to December 1995 and was an associate of CHS
Management from July 1989 to June 1994. From 1987 to July 1989, he was a
Corporate Banking Officer at The First National Bank of Chicago, N.A., a
commercial bank.
DOMINICK DEMICHELE AGE: 44
Mr. DeMichele has served as a director of the Company since January 1996. Mr.
DeMichele has served as Chief Executive Officer of Cookson Specialty Molding
Sector (a division of Cookson Group plc.) since February 1994, and served as
President of Loudon Plastics, Inc. ("Loudon") and Pacific Industries, Inc.
("Pacific") (divisions of Cookson Group plc.) from 1991 to 1995. Mr.
DeMichele is a director of Loudon, Pacific, South Pacific Vinyl, Inc. and
Bicknell Huston Distributors, Inc., all of which are divisions of Cookson
Group plc.
ROBERT C. SLEDD AGE 45
Mr. Sledd has served as a director of the Company since March 1996. Mr. Sledd
has served as Chairman of the Board of Directors of Performance Food Group
Company ("PFG") since February 1995, and has served as a director and as Chief
Executive Officer of PFG since 1987. Mr. Sledd served as President of PFG
from 1987 to February 1995. He served as President and Chief Executive
Officer of Taylor & Sledd Industries, Inc., a predecessor of PFG from 1984 to
1987.
RICHARD P. POLIZZOTTO AGE: 55
Mr. Polizzotto has served as Vice President of the Company since May 1995, and
has served as Vice President of SCP Supply since December 1993. He served as
Vice President of Operations of the Predecessor from June 1992 until December
1993. From 1986 until 1992, he served as Vice President of KSG Industries,
Inc., an auto parts distributor. Prior to 1986, Mr. Polizzotto held a number
of positions with Airwick Industries, Inc. and Airwick Pool Products, and
served as President of Heldor Industries, Inc., a pool supply distributor.
CRAIG K. HUBBARD AGE: 45
Mr. Hubbard has served as Chief Financial Officer, Treasurer and Secretary of
the Company and SCP Supply since February 1997. From December 1993 until
February 1997, he served as controller of SCP Supply, and held the same
position with the Predecessor since September 1991. From 1985 until 1991, he
served as controller of Alerion Bank.
4
<PAGE>
A. DAVID COOK AGE: 41
Mr. Cook has served as Vice President of the Company since February 1997.
From December 1993 until February 1997, he served as the Director of National
Sales Development of SCP Supply, and held the same position with the
Predecessor since August 1993. He served as a regional manager of the
Predecessor from May 1992 until August 1993. From 1988 until May 1992, he
served as a branch manager of the Predecessor.
JOHN M. MURPHY AGE: 36
Mr. Murphy has served as Vice President of the Company since February 1997.
From December 1993 until February 1997, he served as the Director of Marketing
of SCP Supply, and held the same position with the Predecessor since 1988.
INFORMATION ABOUT THE BOARD OF DIRECTORS
The Board of Directors met four times during 1996. The Board of Directors has
standing Audit and Compensation Committees. Each director attended 75% or more
of the meetings of the Board of Directors and any committees on which such
director served during 1996.
Audit Committee. During 1996, the Audit Committee of the Board of Directors
was composed of three directors (Messrs. Gotsch, DeMichele and Sledd). The
Audit Committee met once during 1996. The Audit Committee makes recommendations
to the Board of Directors regarding the selection of independent auditors,
reviews the independence of such auditors, approves the scope of the annual
audit activities of the independent auditors, and reviews such audit results.
Compensation Committee. During 1996, the Compensation Committee was composed
of three directors (Messrs. Code, Gotsch and DeMichele). The Compensation
Committee met once during 1996. The Compensation Committee makes
recommendations to the Board regarding the compensation of officers of the
Company, awards under the Company's compensation and benefit plans and
compensation policies and practices. In March 1997, Mr. Sledd replaced Mr.
DeMichele as a member of the Compensation Committee.
The Company does not have a nominating committee.
DIRECTOR COMPENSATION
Non-employee directors of the Company receive (i) an annual retainer of
$6,000, (ii) $1,000 per board meeting attended, (iii) $500 per committee meeting
attended and (iv) $250 per ad-hoc meeting attended. In addition, non-employee
directors of the Company receive a consulting fee of $100 per hour for tasks
performed outside the scope of their service as directors. Directors who are
employees of the Company or its subsidiaries are not entitled to receive any
fees for serving as directors, except that all directors are reimbursed for out-
of-pocket expenses related to their service as directors.
Under the 1996 Non-Employee Director Equity Incentive Plan (the "Directors
Plan"), each non-employee director was granted an option to purchase 2,500
shares of Common Stock upon the
5
<PAGE>
establishment of the Directors Plan. In addition, each non-employee director was
granted an option to purchase 2,500 shares of common stock immediately following
the May 1996 annual meeting of the Company's stockholders and will be granted
options to purchase an additional 2,500 shares immediately following each
subsequent annual meeting of the Company's stockholders. Options granted
pursuant to the Directors Plan become exercisable one year after grant, subject
to certain exceptions. The option price per share of Common Stock under the
Directors Plan is equal to 100% of the fair market value of the Common Stock at
the date of grant. Each option granted under the Directors Plan is exercisable
for ten years after the date of grant.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers, directors and persons who beneficially own more than ten
percent of a registered class of the Company's equity securities to file reports
of securities ownership and changes in such ownership with the Securities and
Exchange Commission (the "SEC"). Officers, directors and greater than ten-
percent beneficial owners also are required by rules promulgated by the SEC to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such forms furnished to the
Company, or written representations that no Form 5 filings were required, the
Company believes that each of its officers, directors and greater than ten-
percent beneficial owners complied with all Section 16(a) filing requirements
applicable to them during fiscal 1996, with the exception of Mr. DeMichele's
initial statement of beneficial ownership and statement of change in beneficial
ownership and Mr. Polizzotto's statement of change in beneficial ownership, each
of which was inadvertently filed late.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of March 18, 1997 by (i) each person
who is known by the Company to own beneficially more than 5% of the Company's
Common Stock, (ii) each director and named executive officer of the Company, and
(iii) all directors and executive officers of the Company as a group. Except as
otherwise indicated below, to the knowledge of the Company, each of the persons
named in the table has sole voting and investment power with respect to the
securities beneficially owned by it or him as set forth opposite its or his
name. Unless otherwise indicated, the business address of each person is the
Company's corporate address.
6
<PAGE>
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER NUMBER OF SHARES(1) PERCENT OF CLASS(2)
------------------------ ------------------- -------------------
<S> <C> <C>
Code, Hennessy & Simmons 1,510,933 35.8%
Limited Partnership (3)
Andrew W. Code (4)(5) 1,526,533 36.1%
Daniel J. Hennessy (4)(6) 1,512,233 35.8%
Brian P. Simmons (4)(7) 1,535,933 36.4%
Wilson B. Sexton (8) 153,157 3.6%
St. Romain Children's Trust (9) 83,324 2.0%
Frank J. St. Romain (10) 75,833 1.8%
Maurice D. Van Dyke (11) 134,000 3.2%
Richard P. Polizzotto (12) 32,474 *
Peter M. Gotsch (13) 6,817 *
Dominick DeMichele (14) 9,000 *
Robert C. Sledd (15) 5,500 *
All executive officers and directors as a group
(8 persons) 2,039,864 48.3%
</TABLE>
- --------------
(1) Includes shares of Common Stock subject to options which are exercisable
within 60 days of March 18, 1996 and shares of Common Stock issuable upon
conversion of the Company's Convertible Subordinated Promissory Notes due
December 31, 2002 (the "Convertible Notes").
(2) Shares of Common Stock subject to options which are exercisable within 60
days of March 18, 1997 and shares of Common Stock issuable upon conversion
of the Convertible Notes are considered outstanding for the purpose of
determining the percent of the class held by the holder of such options or
notes, but not for the purpose of computing the percentage held by others.
Percentages less than one percent are denoted by an asterisk.
(3) The business address of CHS is 10 South Wacker Drive, Suite 3175, Chicago,
Illinois 60606.
(4) 1,510,933 of such shares are held of record by CHS. Messrs. Code, Hennessy
and Simmons are general partners of the general partner of CHS and share
investment and voting power with respect to the securities owned by CHS.
Each of Messrs. Code, Hennessy and Simmons disclaims beneficial ownership of
such shares except to the extent of his pecuniary interest therein. The
business address of each such person is c/o CHS, 10 South Wacker Drive,
Suite 3175, Chicago, Illinois 60606.
7
<PAGE>
(5) 10,000 of such shares are held directly by Mr. Code, and 600 of such shares
are held by Mr. Code as custodian for his minor children under the Uniform
Gifts to Minors Act. Also includes options to purchase 5,000 shares issued
to Mr. Code pursuant to the Directors Plan.
(6) 1,000 of such shares are held by minor children of Mr. Hennessy, and Mr.
Hennessy disclaims beneficial ownership of such shares. 300 of such shares
are held by Mr. Hennessy and his spouse as joint tenants.
(7) 25,000 of such shares are held by Mr. Simmons and his spouse as joint
tenants.
(8) Includes 20,831 shares issuable upon conversion of the Convertible Note
held of record by Mr. Sexton and options to purchase 30,000 shares issued
to Mr. Sexton pursuant to the Plan.
(9) Includes 20,831 shares issuable upon conversion of the Convertible Note
held of record by the St. Romain Children's Trust.
(10) Includes options to purchase 30,000 shares issued to Mr. St. Romain
pursuant to the Plan.
(11) Includes 42,174 shares held directly by Mr. Van Dyke, 8,502 shares issuable
upon conversion of the Convertible Note held of record by Mr. Van Dyke and
83,324 shares (including 20,831 shares issuable upon conversion of a
Convertible Note) held of record by the St. Romain Children's Trust, of
which Mr. Van Dyke is the Trustee. As the Trustee, Mr. Van Dyke has
investment and voting power with respect to the shares held by the trust.
The business address of Mr. Van Dyke is 109 Northpark Boulevard, Covington,
Louisiana 70433. Mr. Van Dyke retired from the Company and SCP Supply in
February 1997.
(12) Includes 5,952 shares issuable upon conversion of the Convertible Note held
of record by Mr. Polizzotto.
(13) Includes options to purchase 5,000 shares issued to Mr. Gotsch pursuant to
the Directors Plan. Mr. Gotsch is a Managing Director of an affiliate of
CHS but does not share investment or voting discretion with respect to the
securities held by CHS.
(14) Includes options to purchase 5,000 shares issued to Mr. DeMichele pursuant
to the Directors Plan.
(15) Includes options to purchase 5,000 shares issued to Mr. Sledd pursuant to
the Directors Plan.
8
<PAGE>
EXECUTIVE COMPENSATION
The following tables summarizes the compensation paid to the Company's chief
executive officer and three other most highly compensated executive officers
(collectively, the "Named Executive Officers") during the year ended December
31, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------- -------------------------------------------
AWARDS PAYOUTS
------------------------------ ---------
OTHER SECURITIES ALL
ANNUAL RESTRICTED UNDERLYING LTIP OTHER
NAME AND PRINCIPAL FISCAL SALARY BONUS COMPENSATION STOCK AWARDS OPTIONS/SARS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
- ------------------ ------- ------ ------ ------------ ------------ ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Wilson B. Sexton 1996 192,938 192,938 -- -- 15,000 -- 12,799(1)
Chairman 1995 183,750 183,750 -- -- -- -- 14,210(2)
1994 175,000 164,500 -- -- -- -- 3,172(3)
Frank J. St. Romain 1996 192,938 192,938 -- -- 15,000 -- 12,799(4)
President and Chief 1995 183,750 183,750 -- -- -- -- 15,802(5)
Executive Officer 1994 175,000 164,500 -- -- -- -- 16,542(6)
Maurice D. Van Dyke (7) 1996 110,048 25,000 -- -- -- -- 11,855(8)
Chief Financial Officer, 1995 105,000 25,000 -- -- -- -- 14,468(9)
Treasurer and Secretary 1994 100,000 25,000 -- -- -- -- 12,377(10)
Richard P. Polizzotto 1996 112,000 20,000 -- -- 3,250 -- 10,582(11)
Vice President 1995 112,000 30,000 -- -- 4,081 -- 15,041(12)
1994 90,586 30,000 -- -- -- -- 16,498(13)
</TABLE>
- ------------------------
(1) Reflects a $1,335 life insurance premium and $11,464 contributed under the
Company's 401(k) plan.
(2) Reflects a $2,811 life insurance premium and $11,399 contributed under the
Company's 401(k) plan.
(3) Reflects a life insurance premium.
(4) Reflects a $1,335 life insurance premium and $11,464 contributed under the
Company's 401(k) plan.
(5) Reflects a $4,403 life insurance premium and $11,399 contributed under the
Company's 401(k) plan.
(6) Reflects a $3,847 life insurance premium and $12,695 contributed under the
Company's 401(k) plan.
(7) Mr. Van Dyke retired from the Company and SCP Supply in February 1997.
(8) Reflects a $1,335 life insurance premium and $10,520 contributed under the
Company's 401(k) plan.
(9) Reflects a $4,403 life insurance premium and $10,065 contributed under the
Company's 401(k) plan.
(10) Reflects a $4,170 life insurance premium and $8,207 contributed under the
Company's 401(k) plan.
(11) Reflects a $1,335 life insurance policy premium and $9,247 contributed
under the Company's 401(k) plan.
(12) Reflects a $6,084 life insurance premium and $8,957 contributed under the
Company's 401(k) plan
(13) Includes a $5,755 life insurance premium and $10,743 contributed under the
Company's 401(k) plan.
9
<PAGE>
The following table sets forth, for the executive officers of the Company,
information regarding stock options granted or exercised during, or held at the
end of, 1996.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------------------
NUMBER OF SECURITIES POTENTIAL REALIZABLE VALUE
UNDER- % OF TOTAL AT ASSUMED ANNUAL RATES OF
LYING OPTIONS/ OPTIONS/SARS EXERCISE STOCK PRICE APPRECIATION
SARS GRANTED TO OR BASE FOR OPTION TERM (5)
GRANTED EMPLOYEES IN PRICE EXPIRATION ----------------------------
NAME (#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ----- --------------------- -------------- ---------- ---------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
WILSON B. SEXTON(1)(3) 15,000 24% $11.25 12/31/03 79,772 190,721
- -------------------------------------------------------------------------------------------------------------------------------
FRANK J. ST. ROMAIN(1)(3) 15,000 24% $11.25 12/31/03 79,772 190,721
- -------------------------------------------------------------------------------------------------------------------------------
MAURICE D. VAN DYKE(2) -0- -0- -0- -- -0- -0-
- -------------------------------------------------------------------------------------------------------------------------------
RICHARD POLIZZOTTO(3)(4) 3,250 5% $11.25 12/31/03 17,284 41,323
</TABLE>
- ---------------
(1) Options were granted and become immediately exercisable on January 24, 1996
pursuant to the SCP Pool Corporation 1995 Stock Option Plan.
(2) Mr. Van Dyke retired from the Company and SCP Supply in February 1997
(3) In order to prevent dilution or enlargement of rights under the options, in
the event of a reorganization, recapitalization, stock split or combination
or other change in the shares of the Company's Common Stock, the number and
type of shares available upon exercise and the exercise price will be
adjusted accordingly. The Compensation Committee may, subject to certain
restrictions, accelerate or defer the date on which an option becomes
exercisable.
(4) Options become exercisable on January 24, 1998 and were granted on January
24, 1996 pursuant to the SCP Pool Corporation 1995 Stock Option Plan. In the
event of a sale of the capital stock of the Company with the voting power to
elect a majority of the directors or a sale of more than 50% of the
Company's total assets (on a consolidated basis), all options become fully
vested and exercisable.
(5) Amounts reflect assumed rates of appreciation from the fair market value on
the date of grant as set forth in the Securities and Exchange Commission's
executive compensation disclosure rules. Actual gains, if any, on stock
option exercises depend on future performance of the Common Stock and
overall stock market conditions. No assurance can be made that the amounts
reflected in these columns will be achieved.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS AT
FISCAL YEAR END (#) FISCAL YEAR END ($)
VALUE
SHARES ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE ($) UNEXERCISABLE UNEXERCISABLE(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WILSON B. SEXTON -0- -0- 15,000/0 (1) 142,500/0 (1)
FRANK J. ST. ROMAIN -0- -0- 15,000/0 (1) 142,500/0 (1)
MAURICE D. VAN DYKE (2) -0- -0- 0/0 0/0
RICHARD POLIZZOTTO -0- -0- 0/7,331 (3) 0/94,539(3)
</TABLE>
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(1) As of the end of the fiscal year, all of the options held by Mr. Sexton and
Mr. St. Romain were exercisable, and none had been exercised.
(2) Mr. Van Dyke retired from the Company and SCP Supply in February 1997.
(3) As of the end of the fiscal year, none of the options held by Mr. Polizzotto
were exercisable, and none had been exercised.
10
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EMPLOYMENT AGREEMENTS
In connection with the acquisition (the "SCP Acquisition") of all of the
assets of the Predecessor, SCP Supply entered into oral employment agreements
with each of Wilson B. Sexton, Frank J. St. Romain and Maurice D. Van Dyke. The
agreements currently provide, in part, that SCP Supply will pay (i) Messrs.
Sexton and St. Romain an annual base salary of $192,938 and an annual cash bonus
of up to 100% of base salary, and (ii) Mr. Van Dyke an annual base salary of
$110,048 and an annual cash bonus of up to $25,000. Pursuant to such agreements,
each of Messrs. Sexton, St. Romain and Van Dyke are entitled to be included in
SCP Supply's medical program until Medicare coverage begins (or, if earlier,
until terminated for cause or until voluntary termination of employment prior to
1999 (or, in the case of Mr. Van Dyke, prior to reaching age 65)), and each will
receive an automobile allowance of $600 per month.
In connection with the acquisition of all of the outstanding stock of Orcal
Pool Supplies, Inc. ("Orcal Acquisition") in March 1995, the Company and SCP
Supply entered into a written Management Agreement with Ronald Hetzner (the
former owner of Orcal), pursuant to which Mr. Hetzner is employed by SCP Supply
as President of Orcal Pool Supplies, a division of SCP Supply. The Agreement
provides that SCP Supply will pay Mr. Hetzner an annual salary of $100,000. The
agreement runs for a period of three years, unless terminated earlier by the
resignation, death, permanent disability or incapacity of Mr. Hetzner, or by the
Company (with or without cause). If terminated without cause, Mr. Hetzner is
entitled to receive his salary for a period of eighteen months or if less, until
the end of the three-year employment term. Mr. Hetzner served as a director of
the Company from March 1995 until June 1995.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Code, Gotsch and DeMichele served as members of the Company's
Compensation Committee during 1996. In March 1997, Mr. Sledd replaced Mr.
DeMichele as a member of the Compensation Committee. Mr. Code is a general
partner of CHS Management. Mr. Gotsch has been a Managing Director of Code,
Hennessy & Simmons, Inc., an affiliate of CHS, since January 1996, was a Vice
President of CHS Management from June 1994 to December 1995 and was an associate
of CHS Management from July 1989 to June 1994. See ''Certain Relationships and
Related Transactions.'' Mr. Code and Mr. Gotsch each served as Vice President of
the Company from December 1993 until May, 1995.
Mr. DeMichele is the Chief Executive Officer of Cookson Specialty Molding
Sector (the "Molding Sector"), a division of Cookson Group plc. Mr. DeMichele
is also a director of Pacific Industries, Inc. ("Pacific"), a member of the
Molding Sector. Pacific received approximately $7,880,000 in payments from the
Company in 1996 for property and services, and expects to receive over
$10,000,000 in payments from the Company in 1997. The Company believes that the
payments made to Pacific reflect a fair market rate for the products and
services provided.
11
<PAGE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the "committee")
reviews and makes recommendations to the Board regarding salaries, compensation
and benefits of executive officers and key employees of the Company and develops
and administers programs providing stock-based incentives. After consideration
of the committee's recommendations, the entire Board reviews and approves the
salaries and bonuses and the stock and benefit programs for the Company's
executive officers. This committee report documents the components of the
Company's executive officer compensation programs and describes the bases upon
which compensation will be determined by the committee with respect to the
executive officers of the Company.
This committee report shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
Compensation Philosophy. The compensation philosophy of the Company is to
link executive and employee compensation to continuous improvements in corporate
performance and increases in stockholder value. The goals of the Company's
executive and employee compensation programs are as follows:
. To establish pay levels that are necessary to retain and attract highly
qualified executives in light of the overall competitiveness of the
market for high quality executive talent.
. To recognize superior individual performance, new responsibilities and
new positions within the Company.
. To balance short-term and long-term compensation to complement the
Company's annual and long-term business objectives and strategy and
encourage executive performance in furtherance of the fulfillment of
those objectives.
. To provide variable compensation opportunities based on the Company's
performance.
. To encourage stock ownership by executives and other employees.
. To align executive and employee remuneration with the interests of
stockholders.
Compensation Program Components. The committee regularly reviews the
Company's compensation program to ensure that pay levels and incentive
opportunities are competitive with the market and reflect the performance of the
Company. The particular elements of the compensation program for executive
officers are further explained below.
Base Salary. Base pay levels for Messrs. Sexton, St. Romain and Van Dyke
are determined pursuant to their employment agreements. See "Executive
Compensation--Employment
12
<PAGE>
Agreements." Mr. Polizzotto's base pay level is determined by the committee in
its discretion based on achievement of goals and objectives determined by it.
Annual Incentives. Annual bonus formulae for Messrs. Sexton, St. Romain, and
Van Dyke were negotiated in connection with the SCP Acquisition. See
"Executive Compensation--Employment Agreements." The annual bonus for Mr.
Polizzotto is determined by the committee in its discretion based on
achievement of goals and objectives determined by it. At the time of the
adoption of the Plan, the Company and Messrs. Sexton and St. Romain agreed to
decrease the maximum bonus payable to Messrs. Sexton and St. Romain to an
amount equal to 100% of base salary, and that such executives would be
eligible to receive immediately exercisable options to purchase Common Stock.
The Company uses annual bonuses to enhance management's contribution to
stockholder returns by offering competitive levels of compensation for the
attainment of the Company's financial objectives. In particular, the Company
utilizes annual bonuses to focus corporate behavior on the achievement of
goals for growth, financial performance and other items.
Stock Ownership. The committee believes that it can align the interests of
stockholders, executives and other employees of the Company by providing those
persons who have substantial responsibility over the management and/or growth
of the Company with an opportunity to establish a meaningful ownership
position in the Company. Pursuant to the Plan, the Company granted stock
options to Mr. Polizzotto in February 1995 and to Messrs. Sexton, St. Romain
and Polizzotto in January of 1996 and January of 1997.
Chairman and Chief Executive Officer Compensation. The base pay level and
annual incentive bonus compensation for Mr. Sexton, the Company's Chairman, and
Mr. St. Romain, the Company's Chief Executive Officer, are determined in
accordance with their employment agreements. Pursuant to such employment
agreements, the base salaries of Messrs. Sexton and St. Romain for 1994 were set
at $175,000, were increased to $183,750 for 1995 and were increased to $192,938
in 1996. In addition, in 1994, each of Messrs. Sexton and St. Romain was
entitled to a cash bonus of up to 200% of his base salary, based on achievement
of goals and objectives determined by the Board. Consistent with its plan to
increase executives' meaningful ownership position in the Company and align
executives' interests with those of the Company's stockholders, commencing in
1995, the annual cash bonus payable to Messrs. Sexton and St. Romain is limited
to up to 100% of base salary, and each of Messrs. Sexton and St. Romain is
eligible to receive options exercisable for Common Stock. Messrs. Sexton and St.
Romain were each granted options to purchase 15,000 shares of Common Stock in
January 1996, at an exercise price of $11.25 per share, and in January 1997, at
an exercise price of $19.25 per share.
Certain Tax Considerations. Section 162(m) of the Internal Revenue Code of
1986, as amended, limits the deductibility on the Company's tax return of
compensation over $1 million to any of the Named Executive Officers, unless, in
general, the compensation is paid pursuant to a plan which is performance-based,
non-discretionary and has been approved by the Company's stockholders. The
Company's policy with respect to Section 162(m) is to make reasonable efforts to
ensure that compensation is deductible without limiting the Company's ability to
attract and retain qualified executives.
13
<PAGE>
Summary. After its review of all existing programs, the committee believes
that the total compensation program for executives of the Company is focused on
increasing values for stockholders and enhancing corporate performance. The
committee currently believes that the compensation of executive officers and
other employees is properly tied to stock appreciation through stock options or
stock ownership. The committee believes that executive and employee
compensation levels at the Company are competitive with the compensation
programs provided by other corporations with which the Company competes. The
foregoing report has been approved by all members of the committee.
COMPENSATION COMMITTEE
Andrew W. Code
Peter M. Gotsch
Dominick DeMichele
PERFORMANCE GRAPH
The following graph compares the performance of the Company's Common Stock
with the Nasdaq National Market Composite Index and with the S&P SmallCap 600
Index. The Company has chosen the S&P SmallCap 600 Index for comparison because
the Company does not believe that it can reasonably identify a peer group or a
published industry or line-of-business index that contains companies in a
similar line of business and because the S&P SmallCap 600 Index includes
companies of similar capitalization to the Company.
[GRAPH APPEARS HERE]
10/12/95 12/29/95 12/31/96
-------- -------- --------
SCP Pool Corporation $100 $ 99 $198
S&P SmallCap 600 $100 $104 $127
The Nasdaq Stock Market $100 $102 $125
14
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
NONCOMPETITION AGREEMENTS
In connection with the SCP Acquisition, Messrs. Sexton, St. Romain, Van
Dyke, Polizzotto, Cook and Murphy along with the Predecessor's other
shareholders, entered into noncompetition agreements pursuant to which they
agreed not to engage in a business substantially similar to that of the Company
for a period of five years from the date of the SCP Acquisition.
STOCKHOLDER NOTES
Eleven of the Company's current stockholders (all of whom were stockholders
of the Predecessor) are holders of the Company's Convertible Subordinated
Promissory Notes due December 31, 2002 (the "Convertible Notes") in the
aggregate principal amount of $125,000. They received such notes pursuant to the
liquidation of the Predecessor following the SCP Acquisition. Such notes were
originally issued by the Company to the Predecessor as consideration pursuant to
the SCP Acquisition. In addition, Mr. Hetzner is the holder of the Company's
Junior Subordinated Promissory Notes due April 10, 1998 (the "Hetzner Notes"),
in the original principal amount of $2,650,000, which he received in connection
with the Orcal Acquisition. As of March 18, 1997, the Company has repaid
$883,333 of the principal amount of the Hetzner Notes.
The Convertible Notes bear interest at a rate of 10% per annum and mature
on December 31, 2002. The Convertible Notes are subordinated to the Second
Amended and Restated Credit Agreement, dated as of September 26, 1996, by and
among SCP Supply, The First National Bank of Chicago, as agent, and various
lenders from time to time party thereto (the "Senior Loan Facility") and certain
other indebtedness. The Convertible Notes are convertible into the number of
shares of Common Stock determined by dividing the principal amount of the note
by approximately $1.47, as adjusted for the subdivision or combination of such
shares and for the issuance of any Common Stock (or securities converted into or
exchangeable for shares of Common Stock) at a price per share less than the
conversion price for the Convertible Notes.
The Hetzner Notes bear interest at a rate of 8% per annum and are payable
in three equal annual installments, with the final installment payable on April
10, 1998. The Hetzner Notes are subordinated to the Senior Loan Facility and
certain other indebtedness.
TRANSACTIONS WITH CHS
In connection with the Orcal Acquisition, CHS executed guaranties in favor
of Mr. Hetzner pursuant to which CHS agreed to guarantee payment by the Company
of the Hetzner Notes.
The Company has in the past and may in the future pay to CHS certain
customary investment banking and financial advisory fees for services rendered
by CHS to the Company in connection with acquisitions undertaken by the Company.
15
<PAGE>
REGISTRATION AGREEMENT
In connection with the SCP Acquisition in December 1993, the stockholders
of the Company at such time (the "Original Stockholders") entered into a
Registration Agreement with the Company (the "Registration Agreement"). The
Registration Agreement provides for certain demand registration rights to CHS,
certain employees of CHS and its affiliates and an additional investor
(collectively, the "Investor Stockholders"), and to subsequent holders of the
Common Stock acquired by such stockholders in connection with the SCP
Acquisition. The demand registration rights began from and after the effective
date of the first registration statement filed by the Company in connection
with the public offering of its securities. The holders of a majority of the
registrable securities held by the Investor Stockholders (and their permitted
transferees) are entitled to request four long-form registrations in which the
Company pays all registration expenses and an unlimited number of short-form
registrations in which the Company pays all registration expenses. Such holders
are also entitled to request an unlimited number of long-form registrations in
which holders of registrable securities pay their pro rata share of registration
expenses. The Company is entitled to postpone a demand registration for up to
six months under certain circumstances, and is not required to effect a demand
registration within six months of a previous registration in which holders of
registrable securities participated without reduction of the number of their
included shares.
The Registration Agreement also provides that, subject to certain
limitations, the Original Stockholders (and their permitted transferees) may
request inclusion of their shares in a registration of securities by the Company
(other than pursuant to the initial public offering of Common Stock or a demand
registration). Expenses incurred in connection with the exercise of such
piggyback registration rights are borne by the Company.
STOCKHOLDER LEASE AGREEMENTS
In November 1993, the Company entered into a lease agreement (the
"Northpark Lease") with Northpark Alliance, LLC, a limited liability company
("Northpark"), the members of which are Messrs. Van Dyke, Sexton, and Polizzotto
and the St. Romain Children's Trust (a trust established for the benefit of the
children of Mr. St. Romain for which Mr. Van Dyke serves as Trustee), with
respect to a facility at 128 Northpark Boulevard, Covington, Louisiana. The
Company used this facility as its corporate headquarters until space constraints
forced it to relocate to another Covington, Louisiana facility in October 1996.
The Northpark Lease has a term of 15 years, commencing on June 10, 1994, and
monthly rental rates ranging from $6,511 to $7,698. The Company believes that
such lease reflects a fair market rate as of the date thereof. The Company is
still obligated to make lease payments under the Northpark Lease, although
Northpark is currently attempting to sell or sublease the facility.
In November 1991, the Company entered into a lease agreement (the "Trust
Lease") with the St. Romain Children's Trust with respect to a service center
(the "Trust Facility") in Baton Rouge, Louisiana. The Trust Lease has a term of
nine years and one month, commencing on December 1, 1991, and monthly rental
rates ranging from $5,053 to $5,360. In March 1997, space constraints forced the
Company to relocate its Baton Rouge service center from the Trust Facility to
another Baton Rouge facility which it rents pursuant to a lease agreement (the
"St. Romain Lease") with Kenneth St. Romain, the regional manager of the Baton
Rouge service center and the son of Frank
16
<PAGE>
J. St. Romain, President and Chief Executive Officer of the Company. The St.
Romain Lease has a term of 5 years, commencing on March 1, 1997, and provides
for rental payments of $9,655 per month. The Company is still obligated to make
payments under the Trust Lease, although the St. Romain Children's Trust is
attempting to sell or sublease the Trust Facility. The Company believes that
both the Trust Lease and the St. Romain Lease reflect a fair market rate as of
the respective dates thereof.
In connection with the Orcal Acquisition, SCP Supply entered into eight
lease agreements with Mr. Hetzner and his affiliates (the "Hetzner Leases"),
pursuant to which SCP Supply rents service center facilities in California which
are owned by Mr. Hetzner and his affiliates. The Hetzner Leases have initial
terms of five years, commencing on February 28, 1995, and monthly rental rates
ranging from approximately $3,600 to $8,748. The aggregate monthly rental
payment under the Hetzner Leases is approximately $46,260. SCP Supply has an
option to renew each such lease for five years at fair market rental rate.
DUAL CHEMICAL FEEDER AGREEMENTS
Pursuant to an agreement dated as of March 31, 1992, by and among Mr.
Sexton and Wexco Incorporated, a Pennsylvania corporation ("Wexco"), Mr. Sexton
assigned all of his rights in a patented device for the delivery of multiple
chemicals into a swimming pool (the "Dual Chemical Feeder") to Wexco in return
for a promise to pay certain royalties. In connection with the acquisition by
the subsidiary Alliance Packaging, Inc. of the chemical manufacturing and
repackaging assets of York Chemical Corporation and Wexco (the "York
Acquisition") in January 1995, the Company purchased all of Wexco's rights and
obligations with respect to the Dual Chemical Feeder, including Wexco's
obligation to make royalty payments to Mr. Sexton. The aggregate royalties paid
to Mr. Sexton in 1996 did not exceed $60,000, and the Company does not expect
that the aggregate royalties payable in 1997 will exceed $60,000.
SUPPLY AGREEMENT WITH PRO-PACKAGING, INC.
In connection with the Orcal Acquisition, the Company entered into a supply
contract with Pro-Packaging, Inc. ("Pro-Packaging"), a manufacturer of tableted
chlorine products and an affiliate of Mr. Hetzner. Pursuant to the supply
contract, the Company agreed to buy, and Pro-Packaging agreed to sell, for an
initial term of two years, subject to renewal for one year on the same terms by
mutual agreement, all tableted chlorine products required by the Company's
California businesses at a price equal to the most favorable price that the
Company could obtain from an unaffiliated supplier in California. In addition,
the Company agreed that Orcal's past due payables to Pro-Packaging, in the
aggregate amount of approximately $884,000 would be paid by the Company by
December 1, 1995 (including $86,000 paid prior to closing of the Orcal
Acquisition).
PLEDGE AGREEMENT
In connection with the SCP Acquisition, the Company loaned Mr. Murphy
$125,000 to purchase certain securities (the "Purchased Securities") of the
Company. Mr.Murphy pledged the Purchased Securities to the Company to secure the
repayment of such loan. As of March 18, 1997, Mr. Murphy
17
<PAGE>
has repaid $105,000 of the principal amount of such loan and the Company has
released the pledge on a proportionate share of the Purchased Securities.
TRANSACTIONS WITH THE COOKSON SPECIALTY MOLDING SECTOR
Mr. DeMichele, a director of the Company, is the Chief Executive Officer
of the Molding Sector, a division of Cookson Group plc. Mr. DeMichele is also a
director of Pacific, a member of the Molding Sector. Pacific received
approximately $7,880,000 in payments from the Company in 1996 and expects to
receive over $10,000,000 in payments from the Company in 1997. The Company
believes that the payments made to Pacific reflect the fair market rate for the
products and services provided.
CERTAIN RELATIONSHIPS
Kenneth St. Romain is a regional manager for the Company in the Baton
Rouge and New Orleans, Louisiana area. In 1996, Mr. St. Romain received
approximately $137,000 in salary and bonus, and the Company expects that his
salary and bonus for 1997 will equal or exceed the amount paid in 1996. Kenneth
St. Romain is the son of Frank J. St. Romain, President and Chief Executive
Officer of the Company. The compensation formula pursuant to which Mr. St.
Romain is paid is identical to that by which the Company's other regional
managers are paid, and includes a fixed salary and a bonus based on
profitability and return on assets of the service centers for which such
managers are responsible. The actual amount of compensation paid to each
regional manager varies as a result of the application of the bonus formula as
well as such manager's seniority and other objective factors.
SOLICITATION AND EXPENSES OF SOLICITATION
The solicitation of proxies will be made initially by mail. The Company's
directors, officers and employees may also solicit proxies in person or by
telephone without additional compensation. In addition, proxies may be solicited
by Corporate Communications, Inc. by telephone or mail. Brokers, dealers, banks,
nominees, fiduciaries and other custodians will be requested to forward
solicitation materials to the beneficial owners of the Common Stock held of
record by such persons and will be reimbursed for reasonable out-of-pocket
expenses incurred by them in doing so. All expenses of solicitation of proxies
will be paid by the Company.
ANNUAL REPORT AND FORM 10-K
Copies of the Company's Annual Report to Stockholders, which includes the
Company's Annual Report on Form 10-K for the Fiscal Year ended December 31,
1996, are being mailed with this Proxy Statement to each stockholder entitled to
vote at the Annual Meeting. Stockholders not receiving a copy of the Annual
Report may obtain one by writing or calling Craig K. Hubbard, SCP Pool
Corporation, 109 Northpark Boulevard, Covington, Louisiana 70433-5001, telephone
(504) 892-5521.
18
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SUBMISSION OF STOCKHOLDER PROPOSALS
FOR THE 1998 ANNUAL MEETING
Stockholder proposals for inclusion in the Proxy Statement to be issued in
connection with the 1998 Annual Meeting of Stockholders must be mailed to Craig
K. Hubbard, SCP Pool Corporation, 109 Northpark Boulevard, Covington, Louisiana
70433-5001, and must have been received by Craig K. Hubbard, on or before
December 6, 1997. The Company will consider only proposals meeting the
requirements of applicable SEC rules.
The Board of Directors
April 11, 1997
19
<PAGE>
SCP POOL CORPORATION
109 NORTHPARK BOULEVARD
COVINGTON, LOUISIANA 70433-5001
PROXY
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Wilson B. Sexton and Craig K. Hubbard,
and each of them, proxies, with power of substitution and revocation, acting
together or, if only one is present and voting, then that one, to vote the stock
of SCP Pool Corporation which the undersigned is entitled to vote at the Annual
Meeting of Stockholders to be held on May 7, 1997 and at any adjournments or
postponements thereof, with all the powers the undersigned would possess if
personally present, as designated herein and authorizes the proxies to vote in
accordance with the recommendations of the Company's management upon such other
business as may properly come before the Annual Meeting of Stockholders.
1. Election of Directors NEW ADDRESS____________________
Nominees: Wilson B. Sexton,
Frank J. St. Romain, Andrew W. Code, _______________________________
Peter M. Gotsch, Dominick DeMichele
and Robert C. Sledd _______________________________
(Continued and to be signed and dated on the reverse side.)
<TABLE>
<CAPTION>
[X] Please mark your | 6167
votes as in this |________
example.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED IN ITEM 1 AND FOR ITEM 2.
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| THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2. |
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<S> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Ratification of the [ ] [ ] [ ] Check here if you plan to [ ]
Directors appointment of attend the annual meeting.
(See Reverse) Ernst & Young LLP
as the Company's Check here for address [ ]
For, except vote withheld from independent public change.
the following nominee(s): accountants.
_______________________________
Please sign exactly as names appear on this Proxy.
Joint owners should each sign. Trustees, executors,
etc. should indicate the capacity in which they are
signing.
___________________________________________________
___________________________________________________
SIGNATURE(S) DATE
</TABLE>
