-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UvgkwE2DuVG1juk7krlGElrtHO6PcjDH3rtJuTCXHhqAFiClahWe/iwXyQkCgIHM VTVZJRuF6SYdgVdvP837Nw== 0000067215-97-000007.txt : 19970814 0000067215-97-000007.hdr.sgml : 19970814 ACCESSION NUMBER: 0000067215-97-000007 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19970731 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970813 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DYCOM INDUSTRIES INC CENTRAL INDEX KEY: 0000067215 STANDARD INDUSTRIAL CLASSIFICATION: WATER, SEWER, PIPELINE, COMM AND POWER LINE CONSTRUCTION [1623] IRS NUMBER: 591277135 STATE OF INCORPORATION: FL FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10613 FILM NUMBER: 97659039 BUSINESS ADDRESS: STREET 1: 4440 PGA BLVD. SUITE 600 STREET 2: FIRST UNION CENTER CITY: PALM BEACH GARDENS STATE: FL ZIP: 33410 BUSINESS PHONE: (561) 627-7171 MAIL ADDRESS: STREET 1: P O BOX 3524 STREET 2: SUITE 860 CITY: WEST PALM BEACH STATE: FL ZIP: 33402 FORMER COMPANY: FORMER CONFORMED NAME: MOBILE HOME DYNAMICS INC DATE OF NAME CHANGE: 19820302 8-K 1 DYCOM INDUSTRIES INC. 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ---------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 29, 1997 ------------------- Dycom Industries, Inc. ----------------------------------------------------- (Exact name of registrant as specified in its charter) Florida 0-5423 59-1277135 - ---------------------------- ------------ ------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 4440 PGA Boulevard, Suite 600 Palm Beach Gardens, Florida 33410 - ----------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (561) 627-7171 -------------------- 2 Item 2. Acquisition or Disposition of Assets. On July 29, 1997, Dycom Industries, Inc., a Florida corporation (the "Company"), through its wholly-owned subsidiary, Dycom Acquisitions, Inc., a Pennsylvania corporation ("Acquisitions"), acquired Communications Construction Group, Inc., a Pennsylvania corporation ("Communications"). The transaction was consummated pursuant to an Agreement and Plan of Merger dated July 7, 1997 (the "Merger Agreement"), among the Company, Acquisitions, Communications, and George Tamasi and Thomas Polis. The Merger Agreement was amended by an Amendment dated as ofJuly 29, 1997 (the "Amendment"). Copies of the Merger Agreement and Amendment are included herewith as Exhibits 99(i) and 99(ii), respectively, and are incorporated herein by reference. The Merger Agreement, as so amended, is hereinafter referred to as the "Agreement". Pursuant to the Agreement and the Articles of Merger dated July 29, 1997 (the "Articles of Merger"), at the Effective Time (as defined in the Agreement), Acquisitions was merged with and into Communications (the "Merger"). As a result of the Merger, the separate corporate existence of Acquisitions ceased and the shareholders of Communications (Messrs. Tamasi and Polis) became shareholders of the Company. Communications will continue its business as a wholly-owned subsidiary of the Company, operating under the name "Communications Construction Group, Inc." The Articles of Merger are included herewith as Exhibit 99(iii), and are incorporated herein by reference. 1,026,621 shares of the Company's common stock, par value $0.33 1/3 per share (the "Common Stock") were issued to each of Mr. Tamasi and Mr. Polis. Upon the consummation of the Merger, each share of common stock of Communications, par value $1.00 per share, and of the preferred shares of Communications, par value $25.00 per share, issued and outstanding immediately prior to the Effective Time, automatically and without any action on the part of the holder thereof, was converted into 959.4588 shares of Common Stock, with the total rounded up to the nearest whole number of shares of Common Stock. Mr. Tamasi and Mr. Polis each received stock representing approximately 9.4465% of the Common Stock issued and outstanding subsequent to the Merger. The consideration paid pursuant to the Agreement resulted from arm's length negotiations between George Tamasi, as shareholder representative and Chairman and Chief Executive Officer of Communications, and Thomas R. Pledger, as Chairman and Chief Executive Officer of the Company. In deciding to approve the Merger and the consideration to be paid in connection therewith, the Board of Directors of the Company considered, among other things, the following factors: the earnings, the financial condition, business, assets, and the management of Communications. The forgoing factors were evaluated by the Board of Directors on the basis of Communications becoming a wholly-owned subsidiary of the Company. In considering the terms of the Merger, no one factor assumed any specific or special significance; rather approval of the terms of the Merger 3 reflects an overall assessment by the Board of Directors of the relative values of the securities of Communications in the context of a stock exchange. The share conversions are based on a total of $28,600,000 in Common Stock, with a value of approximately $13.93 per share, being issued in connection with the Merger. The exchange ratio establishing the shares of stock to be issued to George Tamasi and Thomas Polis was calculated by the Company in accordance with the formula set forth in the Agreement. Pursuant to the Agreement, on July 29, 1997, Communications and the Company entered into five-year employment agreements with Mr. Tamasi and Mr. Polis, included herewith as Exhibits 99(iv) and 99(v), and incorporated herein by reference. The employment agreements provide for their continued employment as President and Chief Executive Officer and as Executive Vice President, respectively. Further, the employment agreements provide that Mr. Tamasi and Mr. Polis will be on the Board of Directors of Communications. Concurrent with the establishment of control over Communications, the Company accounted for the acquisition as a pooling-of-interest. Communications provides construction and engineering services to the telecommunications industry, primarily through long-term contracts with Comcast Cable Communications, Inc. and to other local telecommunications and cable TV companies. The assets acquired as a result of the Merger include vehicles, equipment, furnishings, and leasehold rights and improvements currently used by Communications. The Company intends to use the assets acquired pursuant to the Merger in the business in which the assets were used prior to the Merger, subject to such changes as the Company may deem appropriate in the future. Item 7. Financial Statements and Exhibits. (a) Financial statements of businesses acquired. Page Audited financial statements of Communications Construction Group, Inc. for the fiscal years ended May 31, 1997 and 1996 F-1 (b) Pro forma financial information. Introduction to unaudited pro forma condensed financial statements. F-13 Unaudited pro forma combined consolidated balance sheet as of April 30, 1997. F-14 Unaudited pro forma combined consolidated statements of operations for the nine months ended April 30, 1997 and 1996. F-15 to F-16 4 Page Unaudited pro forma combined consolidated balance sheets as of July 31, 1996 and 1995. F-17 to F-18 Unaudited pro forma combined consolidated statements of operations for the fiscal years ended July 31, 1996, 1995, and 1994. F-19 to F-21 Notes to unaudited pro forma combined Financial statements. F-22 (c) Exhibits 99(i) Agreement and Plan of Merger ("the Merger Agreement") dated July 7, 1997 among Dycom Industries, Inc., Dycom Acquisitions, Inc., Communications Construction Group, Inc., George Tamasi and Thomas Polis. 99(ii) Amendment to the Merger Agreement dated July 29, 1997 among the parties to the Merger Agreement. 99(iii) Articles of Merger of Dycom Acquisitions, Inc. into Communications Construction Group, Inc. dated July 29, 1997. 99(iv) Employment Agreement dated July 29, 1997 between George Tamasi, Communications Construction Group, Inc., and Dycom Industries, Inc. 99(v) Employment Agreement dated July 29, 1997 between Thomas Polis, Communications Construction Group, Inc., and Dycom Industries, Inc. 99(vi) Press Release issued July 30, 1997. 5 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dycom Industries, Inc. (Registrant) Date: August 13, 1997 /s/ Thomas R. Pledger Thomas R. Pledger Chairman and Chief Executive Officer Date: August 13, 1997 /s/ Steven Nielsen Steven Nielsen President and Chief Operating Officer Date: August 13, 1997 /s/ Douglas J. Betlach Douglas J. Betlach Vice President, Treasurer and Chief Financial Officer 6 COMMUNICATIONS CONSTRUCTION GROUP, INC. CONSOLIDATED FINANCIAL STATEMENTS For the Years Ended May 31, 1997 and 1996 INDEX
PAGE Independent Auditor's Report F-1 Consolidated Balance Sheets as of May 31, 1997 and 1996 F-2 Consolidated Statements of Operations for the years ended May 31, 1997 and 1996 F-3 Consolidated Statements of Cash Flows for the years ended May 31, 1997 and 1996 F-4 Consolidated Statements of Changes in Stockholders' Equity for the years ended F-5 May 31, 1997 and 1996 Notes to Consolidated Financial Statements F-6 to F-12 /TABLE 7 INDEPENDENT AUDITOR'S REPORT To the Board of Directors Communications Construction Group, Inc. We have audited the accompanying consolidated balance sheets of Communications Construction Group, Inc. (the "Company") as of May 31, 1997 and 1996, and the related consolidated statements of operations, cash flows and changes in stockholders' equity for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Communications Construction Group, Inc. as of May 31, 1997 and 1996, and the consolidated results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. /s/ Nowalk & Associates Nowalk & Associates Cranbury, New Jersey July 23, 1997 F-1 8 COMMUNICATIONS CONSTRUCTION GROUP, INC. CONSOLIDATED BALANCE SHEETS May 31,
ASSETS 1997 1996 Current assets Cash $ 401,482 $ 92,257 Accounts receivable Trade, less allowance for doubtful accounts of $76,551 and $99,159 11,080,515 7,988,550 Contract retainage 301,378 293,926 Unbilled receivables 178,186 382,072 Materials and supplies inventory 6,297 Prepaid expenses 545,691 36,547 Deferred tax assets 629,234 Other 328,139 158,728 Total current assets 13,464,625 8,958,377 Plant and equipment, net 6,841,609 4,940,060 Other assets Deferred tax assets 106,000 Deposits 146,512 117,031 146,512 223,031 Total Assets $20,452,746 $14,121,468 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current maturities of long-term debt $ 319,563 $ 513,953 Note payable 4,712,895 3,985,119 Accounts payable 2,881,039 2,025,723 Accrued payroll and expenses 3,371,660 2,160,277 Dividends payable 6,000 - Payroll and income taxes payable 2,167,139 1,055,712 Total current liabilities 13,458,296 9,740,784 Long-term debt, net of current maturities 1,149,533 1,575,207 Deferred tax liability 95,134 Total liabilities 14,702,963 11,315,991 Commitments and Contingencies Stockholders' equity Preferred stock 12% cumulative, $25 par value, 2,000 shares authorized, issued and outstanding 50,000 50,000 Common stock - $1 par value, 1,000 shares authorized, 140 shares issued and outstanding 140 140 Paid in capital 143,838 143,838 Retained earnings 5,555,805 2,611,499 Total stockholders' equity 5,749,783 2,805,477 Total $20,452,746 $14,121,468 The accompanying notes to consolidated financial statements are an integral part of these statements.
F-2 9 COMMUNICATIONS CONSTRUCTION GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended May 31,
1997 1996 Contract revenues earned $67,717,326 $50,121,009 Operating costs and expenses 53,290,045 40,995,700 Selling, general and administrative expenses 8,336,135 6,345,137 Interest expense, net of interest income 838,440 518,458 62,464,620 47,859,295 Income before income taxes 5,252,706 2,261,714 Provision for income taxes Current 2,730,500 1,094,000 Deferred ( 428,100) ( 106,000) 2,302,400 988,000 Net income $ 2,950,306 $ 1,273,714 The accompanying notes to consolidated financial statements are an integral part of these statements.
F-3 10 COMMUNICATIONS CONSTRUCTION GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended May 31,
1997 1996 Cash flows from operations Net income $2,950,306 $1,273,714 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 2,585,315 1,905,632 Provision for losses on trade accounts receivable 26,939 Changes in assets and liabilities (Increase) in receivables and contract retainage (2,895,531) ( 511,510) Decrease in inventory 6,297 - (Increase) in deferred tax assets, net ( 428,100) ( 106,000) (Increase) decrease in prepaid expenses deposits and other assets ( 708,036) 20,084 Increase (decrease) in accounts payable and accrued expenses 2,066,699 ( 758,856) Increase in payroll and income taxes payable 1,111,427 412,763 Net cash provided by operating activities 4,688,377 2,262,766 Cash flows from investing activities Capital expenditures (4,482,796) (3,051,434) Cash flows from financing activities Principal payments on long-term debt ( 776,350) ( 922,129) Proceeds from notes payable 1,083,518 1,507,149 (Payments) proceeds from notes payable - stockholders ( 197,524) 183,768 Dividends ( 6,000) Net cash provided by financing activities 103,644 768,788 Net increase (decrease) in cash 309,225 ( 19,880) Cash at beginning of period 92,257 112,137 Cash at end of period $ 401,482 $ 92,257 Supplemental disclosures of cash flow information Cash paid during the year for Interest $ 838,440 $ 518,458 Income taxes $2,097,020 $ 750,237 The accompanying notes to consolidated financial statements are an integral part of these statements.
F-4 11 COMMUNICATIONS CONSTRUCTION GROUP, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the Years Ended May 31, 1997 and 1996
Common Stock Preferred Stock Number Number Paid in Retained of Shares Amount of Shares Amount Capital Earnings Balance, May 31, 1995 126 $126 $193,852 $1,337,785 Stock Issued at Reorganization 14 $ 14 2,000 $50,000 $( 50,014) Net income 1,273,714 Balance, May 31, 1996 140 $140 2,000 50,000 $143,838 $2,611,499 Net income 2,950,306 Preferred Dividend ( 6,000) Balance, May 31, 1997 140 $140 2,000 $50,000 $143,838 $5,555,805 The accompanying notes to consolidated financial statements are an integral part of these statements.
F-5 12 COMMUNICATIONS CONSTRUCTION GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS May 31, 1997 and 1996 1. The accounting policies which have a significant effect on the operations of Communications Construction Group, Inc. (the Company) are as follows: Principals Of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Tampol Enterprises, Inc. (Tampol). At May 31, 1996, Tampol was merged into the Company. The Company's operations consist primarily of cable TV services contracting. All material intercompany accounts and transactions have been eliminated. Equipment Equipment is carried at cost. Depreciation and amortization, for financial reporting purposes, is provided using a straight-line method over the estimated useful lives of the related assets. An accelerated method of depreciation is utilized for income tax purposes. Gains or losses resulting from dispositions are included in operations. Expenditures which improve and extend the life of an asset are capitalized; maintenance and repairs are expensed. Revenue and Cost Recognition The Company derives its revenue principally from construction contracts which extend over one year, that typically specify a price per mile or foot of system cable or strand installed and price per unit of hardware or equipment installed, subject to adjustments in specified circumstances. Revenue and associated costs are recognized as work progresses. Revisions in cost and profit estimated during performance of the work are reflected in the accounting periods in which the facts require recognition. Contract costs include all direct material and labor costs and those indirect costs related to contract performance. This policy substantially approximates the percentage of completion method. F-6 13 COMMUNICATIONS CONSTRUCTION GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Engineering, design, selling, general and administrative costs are charged to expenses as incurred. Billings in advance of performance are accounted for as liabilities and are not recognized as revenue until such time as the work is performed. Unbilled accounts receivable represent revenue recognized for performance under contracts not yet billed. Anticipated losses on contract operations are charged to operations at the time such losses are known. In accordance with the terms of contracts, an amount representing retainage is withheld until completion of the project or until the end of pre-established phases. Final payments of all such amounts may not be received within a one-year period; however, in conformance with trade practice, the full amount of such amounts withheld is included in current assets. Income Taxes Income tax expense is based on reported income adjusted for differences that do not enter into the computation of taxes payable under applicable tax laws. The Company and its subsidiary filed a consolidated federal income tax return for fiscal year ended May 31, 1996. Deferred income taxes are provided for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. 2. PLANT AND EQUIPMENT The following is a summary of plant and equipment at May 31
1997 1996 C> Machinery and equipment $ 2,810,841 $2,167,466 Office equipment 289,611 212,813 Furniture and fixture 180,939 164,139 Transportation equipment 9,023,633 6,231,982 Leasehold improvements 469,397 335,838 Tools 399,275 280,530 13,173,696 9,392,768 Less: accumulated depreciation ( 6,332,087) (4,452,708) $ 6,841,609 $4,940,060 Depreciation expense amounted to approximately $2,585,315 and $1,905,632 for the years ended May 31, 1997 and 1996, respectively.
F-7 14 COMMUNICATIONS CONSTRUCTION GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3. INCOME TAXES The components of the provision (benefit) for income taxes are
1997 1996 Current Federal $2,002,600 $ 857,450 State 727,900 236,550 2,730,500 1,094,000 Deferred Federal ( 293,400) ( 106,000) State ( 134,700) ( 428,100) ( 106,000) Total tax provision (benefit) $2,302,400 $ 988,000 The deferred tax provision (benefit) is the change in the deferred tax assets and liabilities representing the tax consequences of changes in the amount of temporary differences and changes in tax rates during the year. The deferred tax assets and liabilities at May 31 are comprised of the following 1997 1996 Deferred tax assets Property and equipment $ $ 106,000 Non-deductible reserves 629,234 Deferred tax liabilities Property and equipment ( 95,134) Net deferred tax assets $ 534,100 $ 106,000 The difference between the total tax provision and the amount computed by applying the statutory federal income tax rates to pre-tax income is as follows 1997 1996 Statutory rate applied to pre-tax income $1,785,920 $ 768,983 State taxes, net of federal tax benefit 381,347 156,737 Adjustments for amounts not deductible 135,133 62,280 Total tax provision $2,302,400 $ 988,000
F-8 15 COMMUNICATIONS CONSTRUCTION GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. DEBT On October 20, 1993, the Company entered into a new credit facility with PNC Bank N.A., formerly Midlantic Bank N.A. which was then revised December 1, 1996. The facility consists of a $8,500,000 revolving line of credit. Currently, the bank is reviewing this line for extension. This facility bears interest at various rates ranging from PNC Bank's prime rate plus .25% (8.75% at May 31, 1997) and is collateralized by 75% of the trade accounts receivable less than 90 days old, inventories, equipment and machinery. The loan agreement contains certain annual financial covenants related to tangible net worth, debt to tangible net worth and capital expenditure limitations. For purposes of calculating these covenants, the revolving credit facility has been treated as long term debt in accordance with the intentions of the Company and PNC Bank N.A. The agreement also contains a provision whereby repayment of the debt could be accelerated at the sole discretion of PNC Bank N.A. should there be a material and adverse change in the condition of the Company. At May 31, 1996, the Company was in default with the capital expenditures and liabilities to tangible net worth covenants of its loan and security agreement with PNC Bank N.A. A waiver of these defaults was obtained from PNC Bank N.A. on December 10. As of that date all other terms and conditions of the agreement remained in force and effect. In September 1995, the Company entered a secured financing arrangement with CIT Group/Equipment Financing, Inc. in the amount of $922,510. A summary of the key provisions of this debt instrument are i. A processing fee of one percent ii. Collateral pledged was all transportation equipment iii. 48 monthly principal payments of $19,218.95 iv. Interest is calculated using lenders' prime interest rate plus .75% In February 1997, the Company borrowed an additional $355,742 from CIT Group/Equipment Financing, Inc. at 9.5% fixed for four years. The Company was advanced $1,000,000 by Comcast Corporation in 1994. In fiscal 1997, the loan was paid in full. F-9 16 COMMUNICATIONS CONSTRUCTION GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. DEBT (Continued) Long term debt as of May 31, 1997 and 1996 consists of the following
Original Balance Interest Loan Amount 1997 1996 Rate CIT Group Four year term loan $ 922,510 $ 538,131 $768,758 Prime plus .75% Four year term loan 355,742 330,965 9.5% PNC Bank N.A. Three year term loan 600,000 83,325 Prime plus 1.5% Comcast Work performance advance 1,000,000 439,553 Non-interest bearing Stockholders 955,915 600,000 797,524 $3,834,167 1,469,096 2,089,160 Current maturities 319,563 513,953 Long term debt, net of current maturities $1,149,533 $1,575,207
A schedule of debt maturity for each of the next three years and beyond is
1998 319,563 1999 317,683 2000 173,331 2001 and beyond 658,519 $1,469,096
F-10 17 COMMUNICATIONS CONSTRUCTION GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5. COMMITMENTS AND CONTINGENCIES The Company leases buildings under both month-to-month and long-term noncancellable operating lease arrangements. Rental expense for these leases approximated $1,243,448 and $823,541 for the years ended May 31, 1997 and 1996, respectively. Minimum future rental payments under long- term noncancellable operating leases are
1998 686,731 1999 231,400 2000 163,200 2001 67,200 1,148,531
In 1995, New York State audited the Company for compliance with statutory sales and use tax regulations for the years 1989 through 1995. As a result of this audit the Company paid in fiscal 1996 sales tax on several small construction jobs and use tax on vehicles and equipment operated in the state during this period. In January 1997, New York State asserted amounts due from the Company for sales tax and interest for periods through August 31, 1995 in the amount of approximately $1,330,000. The attorney representing the Company in this matter has filed for a conciliation conference to discuss the matter with the state tax authorities. The Company will contest the asserted deficiency vigorously and its attorney recommends that if any liability is established that it pursue fully its rights vis-a-vis its customers and the taxes paid by such customers. Currently, New York State is auditing the customers for sales and use tax compliance. Currently, the Company does not bill its major customer for sales or use tax on its construction work. The customer indicates that the work is not subject to sales or use tax in the states in which the company has built or is building systems for the customer. All of these states with the exception of New Jersey have provided written verification that the services performed by the Company are not taxable. The customer has indicated in writing to the Company that it has self assessed for sales and use tax in New Jersey for work performed by the Company. Further, the Company's corporate council has given its opinion under the individual work contracts that the customer is liable for sales or use tax and penalties and interest if the customer is billed for the tax within twelve months of the contract conclusion. F-11 18 COMMUNICATIONS CONSTRUCTION GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5. COMMITMENTS AND CONTINGENCIES (Continued) Based upon the above facts, management has accrued approximately $164,000 for sales tax on the New York state audit issue. This liability is included in the current liabilities at May 31, 1996 and 1997 with no offsetting receivable. Cost of sales was charged for this accrual in fiscal 1996. If an assessment of tax, interest and penalties is made against the Company, it will assert its rights under its contracts and bill the customers for the amounts assessed. The Company is party to certain litigation relating to the general operations of the business which under the opinion of legal counsel is not expected to exceed insurance coverage limits. 6. EMPLOYEE BENEFIT PLAN All employees of the Company who meet certain minimum age and period of service requirements are eligible to participate in a Section 401(k) plan (the "Plan") as defined by the code. The Plan allows eligible employees to defer up to 15 percent of their annual compensation. The amounts contributed by employees are immediately vested and nonforfeitable. The Company, at management's discretion, may match employees contributions. A matching contribution of $115,000 was made for the fiscal year ended May 31, 1997. 7. RELATED PARTY TRANSACTIONS The Company leases its administrative offices from a partnership under the control of officers of the Company. These payments amounted to $115,200 and $112,200 for the years ended May 31, 1997 and 1996, respectively. 8. SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISKS Most of the Company's operations are with customers in the cable television industry and represent a limited number of contracts. One customer approximates 82% of the current and projected work load. 9. SUBSEQUENT EVENT On July 7, 1997, the Company entered into a plan of merger with Dycom Industries, Inc. (Dycom). The merger will result in the common and preferred stock of the Company being exchanged for common shares of Dycom equal in value to $28,000,000. The merger will be accounted for as a pooling of interest and the Company will operate as a wholly owned subsidiary of Dycom. F-12 19 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS INCLUDING COMMUNICATIONS CONSTRUCTION GROUP, INC. INTRODUCTION TO UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS On July 29, 1997, Dycom Industries, Inc. ("Dycom") entered into an agreement to acquire Communications Construction Group, Inc. ("CCG") for 2,053,242 shares of Dycom's $0.33 1/3 par value common stock. Dycom is accounting for the acquisition as a pooling of interests. The following unaudited pro forma combined consolidated financial statements give effect to the merger on a pooling of interest basis. The unaudited pro forma combined financial statements are based on the respective historical financial statements of Dycom and CCG. The unaudited pro forma combined consolidated balance sheet assumes that the acquisition took place on April 30, 1997 and combines Dycom's April 30, 1997 unaudited consolidated balance sheet with CCG's February 28, 1997 unaudited balance sheet. Also presented are the unaudited pro forma combined balance sheets combining the Dycom consolidated balance sheets as of July 31, 1996 and 1995, respectively, with the CCG balance sheets as of May 31, 1996 and 1995, respectively. The unaudited pro forma combined consolidated statements of operations assume that the acquisition took place as of the beginning of the periods presented and combined Dycom's unaudited consolidated statements of operations for the nine months ended April 30, 1997 and 1996 and for the fiscal years ended July 31, 1996, 1995 and 1994 with CCG's unaudited results of operations for the nine months ended February 28, 1997 and 1996 and for the fiscal years ended May 31, 1996, 1995 and 1994, respectively. This presentation is consistent with the fiscal years expected to be combined after the date of the closing of the acquisition. The unaudited pro forma combined consolidated financial statements are based on the estimates and assumptions set forth in the notes to these statements. The pro forma adjustments made in connection with the pro forma combined financial statements are preliminary and have been made solely for purposes of developing such pro forma financial information for illustrative purposes necessary to comply with the disclosure requirements of the Securities and Exchange Commission. The unaudited pro forma combined financial statements do not purport to be indicative of the results of operations for future periods. F-13 20 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES AND COMMUNICATIONS CONSTRUCTION GROUP, INC. UNAUDITED PRO FORMA COMBINED BALANCE SHEET April 30, 1997
Dycom CCG Pro Forma Pro Forma April 30, 1997 Feb.28, 1997 Adjustments Combined --------------- -------------- ----------- ---------- ASSETS CURRENT ASSETS: Cash and equivalents $ 4,426,490 $ 31,402 $ $ 4,457,892 Accounts Receivable, net 20,818,895 11,844,329 32,663,224 Costs and estimated earnings in excess of billings 11,615,597 190,000 11,805,597 Deferred income taxes, net 1,604,270 1,604,270 Other current assets 1,551,280 45,457 1,596,737 ------------- ------------- ---------- ------------ Total current assets 40,016,532 12,111,188 52,127,720 ------------- ------------- ---------- ------------ PROPERTY AND EQUIPMENT, net 20,872,998 6,468,591 27,341,589 OTHER ASSETS: Intangible assets, net 4,723,130 4,723,130 Deferred tax assets, net 742,407 106,000 848,407 Other 193,668 147,805 341,473 ------------- ------------- ---------- ------------ Total other assets 5,659,205 253,805 5,913,010 ------------- ------------- ---------- ------------ TOTAL $ 66,548,735 $ 18,833,584 $ $85,382,319 ============= ============= =========== ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 7,573,207 $ 3,430,865 $ $11,004,072 Notes payable 7,054,914 5,463,445 12,518,359 Billings in excess of costs and estimated earnings Accrued self-insured claims 2,750,723 2,750,723 Income taxes payable 748,600 1,070,149 1,818,749 Other accrued liabilities 7,800,101 3,371,602 11,171,703 ------------- ------------- ----------- ----------- Total current liabilities 25,927,545 13,336,061 39,263,606 NOTES PAYABLE 8,986,446 1,060,170 (600,000)(3) 9,446,616 ACCRUED SELF-INSURED CLAIMS 7,412,529 7,412,529 ------------- ------------- ----------- ---------- Total liabilities 42,326,520 14,396,231 (600,000) 56,122,751 ------------- ------------- ----------- ---------- STOCKHOLDERS' EQUITY: Preferred stock 50,000 ( 50,000)(3) Common stock 2,923,833 140 684,274 (3) 3,608,247 Additional paid-in capital 25,146,315 143,838 ( 34,274)(3) 25,255,879 Retained (deficit) earnings ( 3,847,933) 4,243,375 395,442 ------------- ------------- ---------- ----------- Total shareholders' equity 24,222,215 4,437,353 600,000 29,259,568 ------------- ------------- ----------- ----------- TOTAL $ 66,548,735 $ 18,833,584 $ $85,382,319 ============ ============= =========== =========== See notes to unaudited pro forma combined financial statements.
F-14 21 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES AND COMMUNICATIONS CONSTRUCTION GROUP, INC. UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED APRIL 30, 1997
Dycom CCG Nine Months Nine Months Ended Ended Pro Forma Pro Forma April 30, 1997 Feb.28, 1997 Adjustments Combined --------------- ------------- ------------ ---------- REVENUES: Contract revenues earned $128,069,236 $48,305,402 $ $176,374,638 Other, net 496,047 344 496,391 ------------ ----------- --------- ----------- Total 128,565,283 48,305,746 176,871,029 ------------ ----------- --------- ------------ EXPENSES: Costs of earned revenue excluding depreciation 103,099,014 8,339,447 141,438,461 General and administrative 11,637,961 5,481,223 17,119,184 Depreciation and amortization 4,473,683 1,753,200 6,226,883 ------------ ----------- ---------- ------------ Total 119,210,658 45,573,870 164,784,528 ------------ ----------- ---------- ------------ INCOME BEFORE INCOME TAXES 9,354,625 2,731,876 12,086,501 PROVISION FOR INCOME TAXES 3,638,495 1,100,000 4,738,495 ------------ ----------- ---------- ------------- NET INCOME $ 5,716,130 $ 1,631,876 $ $ 7,348,006 ============ =========== ========== ============= EARNING PER COMMON AND COMMON EQUIVALENT SHARE: Primary $ 0.64 $ 0.67 ============ ============ Fully diluted $ 0.64 $ 0.67 ============ ============ SHARES USED IN COMPUTING EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE: Primary 8,888,496 10,941,738 ============ ============ Fully diluted 8,888,680 10,941,922 ============ ============ See notes to unaudited pro forma combined financial statements.
F-15 22 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES AND COMMUNICATIONS CONSTRUCTION GROUP, INC. UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED APRIL 30, 1996
Dycom CCG Nine Months Nine Months Ended Ended Pro Forma Pro Forma April 30, 1996 Feb.28, 1996 Adjustments Combined ------------- ------------- ------------ ----------- REVENUES: Contract revenues earned $104,544,413 $35,528,792 $ $140,073,205 Other, net 1,283,278 2,666 1,285,944 ------------ ------------ ----------- ------------ Total 105,827,691 35,531,458 141,359,149 ------------ ------------ ----------- ------------- EXPENSES: Costs of earned revenue excluding depreciation 84,331,152 29,312,178 113,643,330 General and administrative 11,073,271 4,079,630 15,152,901 Depreciation and amortization 4,138,546 1,416,700 5,555,246 ------------ ------------ ------------ ------------- Total 99,542,969 34,808,508 134,351,477 ------------ ------------ ------------ ------------ INCOME BEFORE INCOME TAXES 6,284,722 722,950 7,007,672 PROVISION FOR INCOME TAXES 2,627,702 300,000 2,927,702 ------------- ------------ ------------ ------------- NET INCOME $ 3,657,020 $ 422,950 $ $ 4,079,970 ============= ============ ============ ============= EARNING PER COMMON AND COMMON EQUIVALENT SHARE: Primary $ 0.43 $ 0.38 ============ ============= Fully diluted $ 0.43 $ 0.38 ============ ============= SHARES USED IN COMPUTING EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE: Primary 8,554,808 10,608,050 ============ ============= Fully diluted 8,554,808 10,608,050 ============ ============= See notes to unaudited pro forma combined financial statements.
F-16 23 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES AND COMMUNICATIONS CONSTRUCTION GROUP, INC. UNAUDITED PRO FORMA COMBINED BALANCE SHEET JULY 31, 1996
Dycom CCG Pro Forma Pro Forma July 31, 1996 May 31, 1996 Adjustments Combined -------------- ------------- ----------- ------------- ASSETS CURRENT ASSETS: Cash and equivalents $ 3,835,479 $ 92,257 $ $ 3,927,736 Accounts Receivable, net 13,306,064 8,441,204 21,747,268 Costs and estimated earnings in excess of billings 7,137,212 382,072 7,519,284 Deferred income taxes, net 1,261,065 1,261,065 Other current assets 1,248,405 42,844 1,291,249 ----------- ----------- --------- ------------ Total current assets 26,788,225 8,958,377 35,746,602 ----------- ----------- --------- ----------- PROPERTY AND EQUIPMENT, net 19,574,410 4,940,060 24,514,470 OTHER ASSETS: Intangible assets, net 4,839,447 4,839,447 Deferred tax assets, net 598,887 106,000 704,887 Other 272,916 117,031 389,947 ----------- ----------- ---------- ------------ Total other assets 5,711,250 223,031 5,934,281 ----------- ----------- ---------- ----------- TOTAL $52,073,885 $14,121,468 $ $66,195,353 =========== =========== ========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 3,541,789 $ 2,025,723 $ $ 5,567,512 Notes payable 2,758,795 4,499,072 7,257,867 Billings in excess of costs and estimated earnings 38,714 38,714 Accrued self-insured claims 3,064,229 3,064,229 Income taxes payable 227,619 871,559 1,099,178 Other accrued liabilities 8,151,589 2,344,430 10,496,019 ----------- ----------- ---------- ----------- Total current liabilities 17,782,735 9,740,784 27,523,519 NOTES PAYABLE 9,452,630 1,575,207 (600,000)(3) 10,427,837 ACCRUED SELF-INSURED CLAIMS 7,062,150 7,062,150 ----------- ----------- --------- ------------ Total liabilities 34,297,515 11,315,991 (600,000) 45,013,506 ----------- ------------ --------- ------------ STOCKHOLDERS' EQUITY: Preferred stock 50,000 ( 50,000)(3) Common stock 2,867,164 140 684,274 (3) 3,551,578 Additional paid-in capital 24,473,269 143,838 ( 34,274)(3) 24,582,833 Retained (deficit) earnings ( 9,564,063) 2,611,499 (6,952,564) ------------ ----------- --------- ----------- Total shareholders' equity 17,776,370 2,805,477 600,000 21,181,847 ----------- ----------- --------- ------------ TOTAL $52,073,885 $14,121,468 $ $66,195,353 =========== =========== ========= ============= See notes to unaudited pro forma combined financial statements.
F-17 24 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES AND COMMUNICATIONS CONSTRUCTION GROUP, INC. UNAUDITED PRO FORMA COMBINED BALANCE SHEET JULY 31, 1995
Dycom CCG Pro Forma Pro Forma July 31, 1995 May 31, 1995 Adjustments Combined -------------- ------------- ------------ --------- ASSETS CURRENT ASSETS: Cash and equivalents $ 4,306,675 $ 112,137 $ $ 4,418,812 Accounts Receivable, net 16,330,477 8,259,684 24,590,161 Costs and estimated earnings in excess of billings 5,223,425 72,000 5,295,425 Deferred income taxes, net 385,755 385,755 Other current assets 1,396,201 100,690 1,496,891 ----------- ----------- ---------- ------------ Total current assets 27,642,533 8,544,511 36,187,044 ----------- ----------- ---------- ----------- PROPERTY AND EQUIPMENT, net 18,802,563 3,794,348 22,596,911 OTHER ASSETS: Intangible assets, net 4,994,535 4,994,535 Other 353,227 86,290 439,517 ----------- ----------- ---------- ------------ Total other assets 5,347,762 86,290 5,434,052 ----------- ----------- ---------- ------------ TOTAL $51,792,858 $12,425,149 $ $64,218,007 =========== =========== ========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 5,607,567 $ 2,727,064 $ $ 8,334,631 Notes payable 4,955,080 3,830,510 8,785,590 Billings in excess of costs and estimated earnings 100,951 100,951 Accrued self-insured claims 2,266,855 2,266,855 Income taxes payable 621,483 392,468 1,013,951 Other accrued liabilities 6,585,387 2,468,273 9,053 660 ----------- ----------- ----------- ------------ Total current liabilities 20,137,323 9,418,315 29,555,638 NOTES PAYABLE 13,870,064 1,475,071 (600,000)(3) 14,745,135 ACCRUED SELF-INSURED CLAIMS 6,598,372 6,598,372 ------------ ----------- ----------- ------------ Total liabilities 40,605,759 10,893,386 (600,000) 50,899,145 ------------ ----------- ----------- ----------- STOCKHOLDERS' EQUITY: Common stock 2,847,997 126 684,288 (3) 3,532,411 Additional paid-in capital 24,293,309 193,852 ( 84,288)(3) 24,402,873 Retained (deficit) earnings (15,954,207) 1,337,785 (14,616,422) ----------- ----------- --------- ----------- Total shareholders' equity 11,187,099 1,531,763 600,000 13,318,862 ----------- ----------- --------- ------------ TOTAL $51,792,858 $12,425,149 $ $64,218,007 =========== =========== ========= ============ See notes to unaudited pro forma combined financial statements.
F-18 25 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES AND COMMUNICATIONS CONSTRUCTION GROUP, INC. UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED JULY 31, 1996
Dycom CCG Fiscal Year Fiscal Year Ended Ended Pro Forma Pro Forma July 31, 1996 May 31, 1996 Adjustments Combined -------------- ------------- ----------- ---------- REVENUES: Contract revenues earned $143,932,608 $50,121,009 $ $194,053,617 Other, net 1,202,772 3,852 1,206,624 ------------ ----------- -------- ------------ Total 145,135,380 50,124,861 195,260,241 ------------ ----------- -------- ------------ EXPENSES: Costs of earned revenue excluding depreciation 115,732,334 40,037,056 155,769,390 General and administrative 14,564,558 5,920,464 20,485,022 Depreciation and amortization 5,718,768 1,905,627 7,624,395 ------------- ----------- -------- ------------ Total 136,015,660 47,863,147 183,878,807 ------------- ----------- -------- ------------ INCOME BEFORE INCOME TAXES 9,119,720 2,261,714 11,381,434 PROVISION FOR INCOME TAXES 2,729,576 988,000 3,717,576 ------------- ----------- --------- ------------ NET INCOME $ 6,390,144 $ 1,273,714 $ $ 7,663,858 ============= =========== ========= ============= EARNING PER COMMON AND COMMON EQUIVALENT SHARE: Primary $ 0.73 $ 0.71 ============= ============ Fully diluted $ 0.72 $ 0.70 ============= ============ SHARES USED IN COMPUTING EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE: Primary 8,806,577 10,859,819 ============== =========== Fully diluted 8,875,042 10,928,284 ============== ============ See notes to unaudited pro forma combined financial statements.
F-19 26 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES AND COMMUNICATIONS CONSTRUCTION GROUP, INC. UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED JULY 31, 1995
Dycom CCG Fiscal Year Fiscal Year Ended Ended Pro Forma Pro Forma July 31, 1995 May 31, 1995 Adjustments Combined ------------- ------------ ----------- ------------- REVENUES: Contract revenues earned $143,909,874 $43,047,102 $ $186,956,976 Other, net 1,373,242 3,156 1,376,398 ------------ ----------- ---------- ------------ Total 145,283,116 43,050,258 188,333,374 ------------ ----------- ---------- ------------- EXPENSES: Costs of earned revenue excluding depreciation 117,742,300 35,542,020 153,284,320 General and administrative 14,113,615 4,895,915 19,009,530 Depreciation and amortization 5,911,104 1,254,148 7,165,252 ------------ ----------- ---------- ------------- Total 137,767,019 41,692,083 179,459,102 ------------ ----------- ---------- ------------ INCOME BEFORE INCOME TAXES 7,516,097 1,358,175 8,874,272 PROVISION FOR INCOME TAXES 3,082,893 650,000 3,732,893 ----------- ----------- ----------- ------------ NET INCOME $ 4,433,204 $ 708,175 $ $ 5,141,379 ============ =========== =========== ============ EARNING PER COMMON AND COMMON EQUIVALENT SHARE: Primary $ 0.52 $ 0.49 ============ =========== Fully diluted $ 0.52 $ 0.49 ============ ============ SHARES USED IN COMPUTING EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE: Primary 8,535,524 10,588,766 ============ =========== Fully diluted 8,535,524 10,588,766 ============ =========== See notes to unaudited pro forma combined financial statements.
F-20 27 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES AND COMMUNICATIONS CONSTRUCTION GROUP, INC. UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED JULY 31, 1994
Dycom CCG Fiscal Year Fiscal Year Ended Ended Pro Forma Pro Forma July 31, 1994 May 31, 1994 Adjustments Combined ------------- ------------- ------------ ---------- REVENUES: Contract revenues earned $121,407,707 $30,137,050 $ $151,544,757 Other, net 1,084,195 17,962 1,102,157 ------------ ----------- ---------- ------------ Total 122,491,902 30,155,012 152,646,914 ------------ ----------- ---------- ---------- EXPENSES: Costs of earned revenue excluding depreciation 105,607,777 22,914,998 128,522,775 General and administrative 15,582,953 5,806,742 21,389,695 Depreciation and amortization 7,337,438 683,647 8,021,085 Intangible asset write-off 1,422,876 1,422,876 ------------ ---------- ---------- ------------ Total 129,951,044 29,405,387 159,356,431 ------------ ----------- ---------- ------------ INCOME (LOSS) BEFORE INCOME TAXES ( 7,459,142) 749,625 ( 6,709,517) PROVISION FOR INCOME TAXES 317,781 473,781 791,562 ------------ ----------- ---------- ------------ NET INCOME (LOSS) $( 7,776,923) $ 275,844 $ $( 7,501,079) ============= =========== ========== ============ EARNING (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE: Primary $ (0.91) $ (0.71) ============= ============= Fully diluted $ (0.91) $ (0.71) ============= ============= SHARES USED IN COMPUTING EARNINGS (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE: Primary 8,528,990 10,582,232 ============= =========== Fully diluted 8,528,990 10,582,232 ============= =========== See notes to unaudited pro forma combined financial statements.
F-21 28 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES AND COMMUNICATIONS CONSTRUCTION GROUP, INC. NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS 1. Periods Combined The Dycom consolidated balance sheets as of April 30, 1997 and July 31, 1996 and 1995, respectively, have been combined with the CCG balance sheets as of February 28, 1997 and May 31, 1996 and 1995, respectively. The Dycom consolidated statements of operations for the nine months ended April 30, 1997 and 1996 and for the fiscal years ended July 31, 1996, 1995 and 1994, respectively, have been combined with the CCG results of operations for the nine months ended February 28, 1997 and 1996 and for the fiscal years ended May 31, 1996, 1995 and 1994, respectively. For comparative purposes, certain amounts in the CCG financial statements have been reclassified to conform with the Dycom financial statement presentation. 2. Merger Costs Dycom and CCG estimate they will incur direct transaction costs of approximately $0.5 million associated with the acquisition, consisting of fees for filings with regulatory agencies, legal, accounting and other related costs. These nonrecurring costs will be charged to operations in the fiscal quarter in which the acquisition was consummated. 3. Exchange of Stock The entry reflects the $0.6 million of CCG shareholder loans as additional paid-in capital. The Dycom shares issued in the acqusisition were in exchange for all the outstanding common stock and perferred shares of CCG and for the satisfaction of the shareholder loans. Also, the entry reclassifies CCG's capital to reflect the par value of the Dycom shares issued in the acquisition. 4. Pro Forma Net Income (Loss) Per Share The unaudited pro forma combined net income (loss) per common and common equivalent share is based upon the weighted average number of common and common equivalent shares of Dycom outstanding for each period presented and the 2,053,242 shares of Dycom common stock issued to the CCG shareholders. F-22 EX-99 2 EXHIBIT 99(I) 1 AGREEMENT AND PLAN OF MERGER AMONG COMMUNICATIONS CONSTRUCTION GROUP, INC., GEORGE TAMASI, THOMAS POLIS, DYCOM INDUSTRIES, INC. AND DYCOM ACQUISITIONS, INC. THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is entered into this 7th day of July, 1997 among Communications Construction Group, Inc., a Pennsylvania corporation ("Communications"), George Tamasi and Thomas Polis (collectively "Communications Shareholders"), Dycom Industries, Inc., a Florida corporation ("Dycom"), and Dycom Acquisitions, Inc., a Pennsylvania corporation ("Acquisitions"). W I T N E S S E T H WHEREAS, the parties hereto desire that Acquisitions be merged with and into Communications (the "Merger") upon the terms and subject to the conditions set forth in this Agreement and in accordance with the Business Corporation Law of the Commonwealth of Pennsylvania, all for the purpose of carrying out a reorganization within the meaning of Sections 368(a)(1)(A) and 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the "Code"); NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties herein contained the parties hereto agree as follows: 2 ARTICLE I Merger Section 1.1 Surviving Corporation. At the Effective Time, as defined in Section 1.2, Acquisitions shall be merged into Communications which shall be the surviving corporation (the "Surviving Corporation"). Section 1.2 Effective Time. Subject to the terms of this Agreement, the Merger shall become effective at 12:00 midnight on July 31, 1997(the "Effective Time"), unless the Articles of Merger are filed subsequent to July 31, 1997, in which event the merger shall become effective at the time the Articles of Merger are filed with the Secretary of the Commonwealth of Pennsylvania. The Articles of Merger shall be filed with the Commonwealth of Pennsylvania in substantially the form of Exhibit A hereto or such other form reasonably satisfactory to the parties hereto (the "Articles of Merger") and consistent with this Agreement. Section 1.3 Further Assurances. If at any time after the Effective Time, either party shall determine that any further assignments, assumptions or assurances in law or any other things are necessary or desirable to vest, perfect or confirm of record or otherwise, in any party the title to any property or right acquired or to be acquired by reason or as a result of the Merger, the proper officers and directors of the Surviving Corporation or, as the case may be, the Communications Shareholders and Dycom shall execute and deliver all deeds, assignments and assurances in law and do all things reasonably necessary or proper to vest, perfect and confirm title to such property or rights and otherwise to carry out the terms and conditions of this Agreement, all at the cost and expense of the Surviving Corporation. Section 1.4 By-Laws. The by-laws of Acquisitions in effect immediately prior to the Effective Time shall be and, until amended as therein provided, continue to be the by-laws of the Surviving Corporation after the Effective Time. Section 1.5 Articles of Incorporation. The Articles of Incorporation of Acquisitions as amended and in effect immediately prior to the Effective Time shall be and, until further amended as provided by law, continue to be the Articles of Incorporation of the Surviving Corporation. Section 1.6 Directors. The members of the Board of Directors of Acquisitions immediately prior to the Effective Time shall constitute the Board of Directors of the Surviving Corporation after the Effective Time until their successors shall have been elected and qualified as provided in the by-laws of the Surviving Corporation and this Agreement. 3 ARTICLE II Conversion of Shares At the Effective Time: Section 2.1 Acquisitions Stock. Each share of the common stock of Acquisitions issued and outstanding immediately prior to the Effective Time shall by reason of the merger and without any action on the part of the holder thereof, be converted into and become one share of the common stock of the Surviving Corporation, and each certificate representing outstanding shares of the common stock of Acquisitions immediately prior to the Effective Time shall thereupon become and be deemed for all corporate purposes to evidence the ownership of the same number of fully paid and non-assessable shares of the common stock of the Surviving Corporation. Section 2.2 Communications Common Stock. Each and every share of the common stock of Communications, $1.00 par value and preferred shares of Communications, $25.00 par value ("Communications Shares"), issued and outstanding immediately prior to the Effective Time (other than treasury shares, if any, held by Communications, all of which treasury shares shall be canceled as of the Effective Time) shall be converted automatically and without any action on the part of the holder thereof into the number of shares of the common stock of Dycom ("Dycom Shares") equal to the quotient of: (i) 28,000,000 divided by the number of Communications shares issued and outstanding immediately prior to the Effective Time (other than Communications Shares held by Communications as treasury shares); divided by (ii) the mean average of the respective prices of Dycom common stock (as reported in the Wall Street Journal) for the five (5) business days immediately preceding the date of this Agreement. Section 2.3 Surrendering Procedure. Upon the Effective Time, Communications shall cause all certificates which previously represented outstanding shares of its capital stock to be canceled and surrendered to the Surviving Corporation or any agent designated by it, and, upon such cancellation and surrender, the Surviving Corporation or its agent, as agent for Dycom, shall deliver in substitution therefor certificates representing the number of full Dycom Shares (no fractional shares or cash in lieu thereof shall be delivered) into which such shares have been converted as aforesaid. 4 ARTICLE III Effect of Merger Section 3 Upon the Effective Time: (a) Acquisitions and Communications shall become a single corporation of which Communications shall be the Surviving Corporation and continue its corporate existence under the laws of the Commonwealth of Pennsylvania; the name of the Surviving Corporation shall be "Communications Construction Group, Inc." (b) The separate existence of Acquisitions shall cease, and the Surviving Corporation shall possess all the rights, privileges, immunities and franchises, of a public as well as of a private nature, of Communications and of Acquisitions. All property, real, personal and mixed, all debts due on whatever account, all other choses in action and all and every other interest of or belonging to or due to Communications or Acquisitions shall be taken and deemed to be transferred to and vested in the Surviving Corporation without further act or deed; and the title to any real estate, or any interest therein, vested in Communications or Acquisitions shall not revert or be in any way impaired by reason of the Merger. The Surviving Corporation shall thenceforth be responsible and liable for all the liabilities and obligations of Communications and Acquisitions and any claim existing or action or proceeding pending by or against Communications or Acquisitions may be prosecuted as if the Merger had not taken place, or the Surviving Corporation may be substituted in place of Communications or Acquisitions. Neither the right of creditors nor any liens upon the property of Communications or Acquisitions shall be impaired by the Merger. ARTICLE IV Representations and Warranties of Communications and the Communications Shareholders Communications and each of the Communications Shareholders represent and warrant (except as indicated to the contrary below) to Acquisitions and Dycom as follows: Section 4.1 Due Incorporation, etc.. Communications is a validly organized and existing corporation in subsistence under the laws of the Commonwealth of Pennsylvania and satisfactory evidence of such good standing has heretofore been or will promptly be delivered to Acquisitions and Dycom. Communications has all requisite corporate powers to carry on its business as it is now being conducted, is qualified to do business and is in good standing in every jurisdiction in which the character and location of its assets or the nature of the business transacted by it 5 requires such qualification, except where the failure to be so qualified and in good standing would not have a material and adverse effect on Communications. The copies of the Articles of Incorporation and by-laws, and all amendments thereto, of Communications, which have heretofore been or promptly will be delivered to Acquisitions and Dycom, are complete and correct. Section 4.2 Shareholders and Directors. The shareholders of Communications, the number of Communications Shares held by each shareholder, and all directors of Communications are listed on Schedule 4.2 hereto. Section 4.3 Capitalization. The authorized capital stock of Communications consists of 1000 shares of Communications common stock, having a par value of $1.00 per share, of which 140 shares are issued and outstanding, and 2000 shares of preferred stock, having a par value of $25.00 per share, all of which are issued and outstanding. All of the outstanding Communications Shares have been validly issued and are fully paid and nonassessable. Communications does not have any commitment to issue or sell shares of its stock or any securities or obligations convertible into or exchangeable for, or giving any person any right to acquire from Communications any shares of its stock, except for certain buy/sell agreements between Communications and/or the Communications Shareholders which agreements shall be canceled at the Effective Time. Section 4.4 Financial Statements. The audited financial statements of Communications as of May 31, 1996, consisting of a balance sheet, statement of operations, a statement of cash flows, and a statement of changes in stockholders' equity for the twelve months ended that date which Communications has delivered to Acquisitions and Dycom have been certified by Norwalk & Associates, independent certified public accountants. Such financial statements present fairly the financial position of Communications and the results of its operations and changes in financial positions as of the date and for the period indicated, in conformity with generally accepted accounting principles consistently applied during such period. As of May 31, 1996, there were no material obligations or liabilities (whether accrued, absolute, contingent or otherwise) of Communications not adequately reflected on the balance sheet (and the notes thereto) as of such date. On or before seven (7) days prior to the Effective Time, Communications agrees to deliver to Dycom audited financial statements for the year ended May 31, 1997. Section 4.5 Document List. Communications has furnished, or will furnish at the time of the execution of this Agreement, to Acquisitions and Dycom, a written list (the "Document List"), 6 attached hereto as Schedule 4.5, dated the date of this Agreement, which, to the best knowledge of Communications Shareholders after such inquiry as they determine to be appropriate, identifies and describes all contracts, agreements and instruments, whether written or oral, which are material to the conduct of the business of Communications. Without limiting the generality of the foregoing, the Document List shall include the following contracts, agreements and instruments to which Communications is a party or is otherwise subject or affected: (i) all instruments or arrangements creating liens, encumbrances, mortgages, or charges on any real or personal property of Communications; (ii) all indentures, trust agreements, credit agreements or other instruments relating to any issue of bonds, debentures, notes or other evidences of indebtedness; all employment contracts; all contracts with labor unions representing or attempting to represent employees of Communications; all contracts relating to engineering, legal, accounting, management, consulting and other services; and all material contracts for the purchase of real property, personal property or any interest therein; (iii) all bonus, pension, profit sharing, buy/sell, retirement, stock option, hospitalization or insurance plans or agreements, including without limitation all workers' compensation plans; vacation pay or severance pay, and other plans or arrangements of Communications providing benefits to officers, employees or agents; (iv) all leases, or other agreements to which Communications is a party relating to real or personal property or any interest therein which either do not terminate or are not terminable by Communications within six (6) months from the date hereof; (v) all policies of fire, liability and other forms of insurance (including title insurance) held by and/or covering assets of Communications; (vi) all letters of credits, bank accounts or safe deposit box arrangements of Communications; (vii) all material licenses, permits, filings or authorizations required by any jurisdiction or authority in connection with the business of Communications; and (viii) all contracts or agreements that obligate Communications to perform, provide or purchase goods or services which have an individual value of more than $5,000. Section 4.6 Asset Descriptions. Communications has furnished, or will furnish at the time of the execution of this Agreement, to Acquisitions and Dycom, a list (the "Asset List"), 7 attached hereto as Schedule 4.6, dated the date of this Agreement, describing all motor vehicles and testing equipment owned by Communications. Not later than twenty (20) days prior to the Closing Date as defined in Section 18.3 hereof, Communications shall furnish to Acquisitions and Dycom a supplemental list which identifies all assets owned by Communications. Section 4.7 Litigation List. Communications has also furnished, or will furnish at the time of the execution of this Agreement, to Acquisitions and Dycom, a written description (the "Litigation List"), attached hereto as Schedule 4.7 , dated the date of this Agreement, of all civil or criminal actions, proceedings, arbitrations or investigations pending, or, to the best knowledge of the corporate officers or directors of Communications or the Communications Shareholders, after such inquiry as they determine to be appropriate, threatened by or before any court, governmental agency, regulatory authority or arbitrator against Communications or any director or officer of Communications, in such capacity, as either plaintiff or defendant. Section 4.8 No Material Adverse Change. Since May 31, 1997, there has not been (i) any material adverse change in the financial condition, business properties or assets of Communications in the aggregate; (ii) any loss or damage to any of the properties or assets of Communications (whether or not covered by insurance) which has materially and adversely affected Communications or impaired the ability of Communications to conduct its business; (iii) any other event or condition of any character which has materially and adversely affected the business of Communications; (iv)any mortgage or pledge of any of the properties or assets of Communications (other than as disclosed on the Document List); (v) any purchase, redemption, or other acquisition by Communications of any shares of the stock of Communications; (vi) any declaration or payment of any dividend or other distribution in respect of the stock of Communications; or (vii) any increase paid or agreed to be paid in compensation, retirement benefits or other commitments to employees, other than in the ordinary course of Communications' business. Section 4.9 Good Title, etc. Communications has title to all of its properties, including, without limitation, all property reflected on the balance sheet of Communications dated as of May 31, 1996 (but excluding property disposed of subsequent to May 31, 1996 and prior to the date hereof in the ordinary course of business), as well as all property reflected on the balance sheet of Communications to be dated May 31, 1997 and provided to Dycom and Acquisitions pursuant to Section 4.4 hereof (but excluding property disposed of subsequent to May 31, 1997, and prior to the date hereof), free and clear of any mortgage, lien, pledge, charge, 8 claim or encumbrance except as disclosed in the Document List pursuant to Section 4.5 hereof. Section 4.10 Working Order. Except as described on Schedule 4.10 hereto, all material machinery and equipment of Communications are in working order and repair (normal wear and tear and normal repair or maintenance excepted). Except as set forth in the Document List, Communications has the unrestricted right to use its properties for its operations as presently conducted. Section 4.11 No Breach. Except as otherwise disclosed in writing, Communications has not breached, nor is in default under the terms of any indenture, agreement, employee benefit plan, lease or license to which it is subject or bound that is material to the business of Communications, and, to the best knowledge of the Communications Shareholders after such inquiry as they determine to be appropriate, each such indenture, agreement, employee plan, lease and license is valid and effective. Communications is not in default with respect to any order of any court, regulatory agency or other private or governmental authority, specifically pertaining to Communications. Section 4.12 Tax Returns. Except as otherwise disclosed in writing, Communications has filed all applicable United States, state and local tax returns required to be filed, and any and all other material tax returns required to be filed. Communications has paid or provided for the payment in full of all taxes due to any governmental entity, and has not executed, or agreed to execute, any waivers of any statutes of limitations on the right of any taxing authority to assess additional taxes or to contest the income or loss reported with respect to any tax period. No issues have been raised (and are currently pending) as of the date of this Agreement by the Internal Revenue Service or any other taxing authority in connection with any of the aforesaid tax returns. There are no material taxes or levies of any nature due or payable to any local, state or federal government nor, to the best of their knowledge, shall the consummation of the transactions contemplated by this Agreement result in any such taxes or levies being due and payable. The receipts and expenditures reflected on the U.S. income tax returns (including the supporting schedules filed therewith and as a part thereof) filed by Communications for the fiscal years ended May 31, 1994, 1995 and 1996 and all other open years, copies of which have been supplied (or will be promptly supplied) to Dycom, accurately reflect the receipts and expenditures of Communications, as well as the taxable income and tax deductions for the respective tax years, and the same were derived from the books and records of Communications. 9 Section 4.13 This Agreement Not a Default. Compliance with the terms of this Agreement and consummation of the transactions contemplated by this Agreement will not materially violate or result in a material breach of or constitute a material default under any statute, ordinance or governmental regulation, or any provision of the Articles of Incorporation and by-laws of Communications, or the provisions of any indenture, mortgage, lien, lease, agreement, instrument, order, judgment, decree, or any other restriction of any kind or character to which any property of Communications is bound or by which Communications is bound. Section 4.14 No Other Commitments. Except for the making of capital expenditures in amounts less than $5,000 each and except for the making of capital expenditures which are disclosed in the Asset List (which includes all such expenditures which individually totaled $5,000 or more), since May 31, 1997 Communications has not entered into any transaction or commitment other than in the ordinary course of business. Section 4.15 Information Accurate. All information in writing concerning Communications furnished at or prior to the Effective Time by or on behalf of Communications to Dycom for inclusion in, or use in preparation of, or on behalf of any application or statement or notice made or to be made by Dycom, or filed by Dycom with the Securities and Exchange Commission, any stock exchange or other regulatory agency shall when furnished be true and correct in all material respects without omission of any material fact necessary to be stated to make the information not misleading. Communications may provide Dycom and Acquisitions with a list of all writings so furnished and in the event it does so, shall only warrant the truth and correctness of said writings and any other such additional writings identified in writing by Dycom and provided to Communications, without the omission of any material fact necessary to be stated to make the information not misleading. Communications will provide Dycom in writing such information as Dycom may reasonably request and require in connection with any aforesaid application, statement or notice. Dycom shall furnish Communications a copy of all filings prior to their submission to any governmental or regulatory agency. Section 4.16 Share Ownership. The Communications Shareholders are the record and beneficial owner of all of the Communications Shares and hold the Communications Shares free and clear of any lien, encumbrance, pledge, charge or claim, and have full and absolute right and power to assign, transfer and sell their respective Communications Shares. 10 SECTION 4.17 Due Authorization, etc. The execution and delivery of this Agreement by Communications and the performance by Communications of its obligations under this Agreement have been authorized by its Board of Directors; and Communications has all requisite authority to enter into and perform this Agreement, subject only to the approval of this Agreement by PNC Bank, National Association ("PNC") and Comcast Cable Communications, Inc. Subject to the foregoing, this Agreement is a valid and binding agreement of Communications and the Communications Shareholders, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, or other similar laws of general application affecting the enforcement of creditors' rights generally. Section 4.18 Subsidiaries. Communications does not control (as such term is defined in Section 368(c) of the Code), directly or indirectly, any corporation, association or other business entity. Section 4.19 Consent. Except as provided in Sections 11.10 and 17.1 hereof, no consent, approval or authorization of or registration, qualification, designation, declaration or filing with any governmental authority or private person or entity on the part of the shareholders of Communications is required in connection with the execution and delivery of this Agreement or the consummation of any transaction contemplated hereby. Section 4.20 Patents, etc. Except as described in Schedule 4.20 hereto, Communications does not own or have any patents, applications for patents, written disclosures of inventions, trade names, trademarks, trademark registrations, or agreements, including agreements with its employees, under which Communications is either a licensee and/or licensor (and no such agreements are being negotiated). No amounts are or will at any time hereafter be owing to any employee of Communications in connection with any patent or invention. Section 4.21 Broker's or Finder's Fees, etc. No agent, broker, investment banker, person or firm acting on behalf of Communications or the Communications Shareholders or under the authority of Communications or the Communications Shareholders is or will be entitled to any broker's or finder's fee or any other commission or similar fee directly or indirectly from any of the parties hereto in connection with any of the transactions contemplated herein. Section 4.22 ERISA. No Reportable Event (as described in Section 4043(c) of the Employee Retirement Income Security Act of 1974 ("ERISA") has occurred with respect to any Plan (as defined below) that is subject to the provisions of Title IV of ERISA, and no event with respect to any Plan has occurred which would impose 11 any liability on Communications other than contributions for the plan year ended May 31, 1997. Each Plan is in material compliance, and has been administered materially in accordance, with the applicable provisions of the Code and ERISA. The term "Plan" means any plan described in Section 3(3) of ERISA established by Communications. No transactions prohibited by Section 406 of ERISA and not exempt under Sections 407 and 408 of ERISA has occurred with respect to any Plan established by Communications. The provisions of this Section 4.22 shall also apply to any Plan which is described in Section 3(3) of ERISA and under which Communications has contributed. Section 4.23 Employees. Communications has furnished, or will furnish at the time of the execution of this Agreement, to Dycom, a list (the "Employee List"), attached hereto as Schedule 4.23, dated the date of this Agreement, identifying all individuals in the employ of Communications as of the date of this Agreement, their current periodic compensation, and any extraordinary compensation due them for work performed prior to such date. Except as identified on Schedule 4.23 attached hereto, Communications has no collective bargaining agreement with any of its employees, and except as disclosed in the Document List and/or Litigation List, Communications has not engaged in any discussions with respect to the establishment by any of its employees of a collective bargaining unit or to the execution of a collective bargaining agreement; and except as disclosed in the Litigation List, no election with respect to the unionization of any group of Communications employees has taken place and there are not currently, nor have there been in the past, any such discussions or elections threatened or contemplated. Section 4.24 Insurance. Communications keeps all of its business and properties which are of an insurable nature insured, with insurers reasonably believed by Communications to be responsible against loss or damage or arranges with others to do so. Section 4.25 Compliance with Applicable Law. To the best knowledge of Communications Shareholders after inquiry as they determine to be appropriate, Communications is in compliance in all material respects with all laws, regulations, governmental orders or judgments applicable to its business as a whole, and has all material licenses, permits and other governmental authorizations necessary for the conduct of its business as a whole. 12 Section 4.26 Untrue Statements. No representation or warranty by Communications or the Communications Shareholders in this Agreement contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained therein not misleading. No written information, statement or certificate furnished to Acquisitions or Dycom by Communications or the Communications Shareholders pursuant hereto or in connection with the transactions contemplated hereby, contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained therein not misleading. No breach under this Article IV shall have occurred if any matter which is required to be disclosed on a particular list hereunder is not disclosed on that list, but appears on a different list furnished in accordance with this Article IV. Section 4.27 Environmental Permits, etc. Communications Shareholders warrant that to the best of their knowledge, Communications: (a) is not required to obtain any permits, licenses and other authorizations required under federal, state, local and foreign environmental laws, statutes and ordinances, including but not limited to the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. 9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq., the Federal Water Pollution Control Act, 33 U.S.C. 1251 et seq., the Clean Air Act, 41 U.S.C. 2601 et seq., as amended, the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. 136 to 1364, the Occupational Safety and Health Act of 1970, 29 U.S.C. 651 to 678, and any applicable state or local law relating to the protection of the environment, and including any rules, regulations, orders, decrees, plans, codes, judgments, injunctions, notices or demand letters, prohibitions, obligations, schedules, timetables, standards, conditions or requirements issued, entered, approved or promulgated thereunder, relating to pollution or protection of the environment, including laws relating to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, wastewater, industrial substances, toxic substances, hazardous substances (as defined in Section 101(14) of CERCLA, 41 U.S.C. 9601(14)), or solid or hazardous wastes in, into, onto or upon the environment (including, without limitation, ambient air, surface water, ground water, or land), or otherwise relating to the manufacture, processing, distribution, use, treatment, collection, accumulation, storage, disposal, transport, or handling of pollutants, contaminants, chemicals, wastewater, or industrial, toxic or hazardous substances or wastes (collectively the "Environmental Laws"); and (b) is in compliance with all applicable Environmental Laws. Communications 13 has not received (i) any notice of the violation or alleged violation of, or noncompliance or alleged noncompliance with, any of the Environmental Laws, permits, licenses or other authorizations; (ii) any notice, demand, claim, order or request for the performance of, or the payment of costs or expenses for, any test, investigation, assessment, examination, cleanup, removal, remediation, mitigation, response, treatment or restoration with regard to environmental conditions; or (iii) any notice, or have knowledge of, any environmental contamination or the disposal of any hazardous substance, pollutant or contaminant at, in, into, onto, upon, by or from any real property owned, operated, possessed or used by Communications or the environment; and there is not now and has not been, as a result of Communications' activities (y) any violation or alleged violation, or noncompliance or alleged noncompliance with, any of the Environmental Laws, permits, licenses, or other authorizations; or (z) any environmental contamination of, or the disposal of any hazardous substance, pollutant or contaminant at, in, into, onto, upon, by or from any real property owned, operated, possessed or used by Communications or the environment. Communications has not disposed of, has not arranged for the disposal of, nor has any knowledge of the disposal of, any hazardous substance on any real property that is covered by this Agreement. ARTICLE V Representations and Warranties of Dycom and Acquisitions Dycom and Acquisitions represent and warrant to Communications as follows: Section 5.1 Due Incorporation, etc. Dycom and Acquisitions are validly organized and existing corporations in good standing and in subsistence under the laws of Florida and Pennsylvania, respectively. Each of Dycom and Acquisitions has all requisite corporate power to carry on its business as now conducted, and is qualified to do business in every jurisdiction in which the character and location of its assets or the nature of the business transacted by it requires such qualification, except where the failure to be so qualified and in good standing would not have a material and adverse effect on Dycom or Acquisitions. The copies of the Articles of Incorporation and by-laws, and all amendments thereto, of Dycom and Acquisitions, which have heretofore been or will promptly be delivered to Communications, are complete and accurate. 14 Section 5.2 Financial Statements. The consolidated financial statements of Dycom as of July 31, 1996, consisting of the consolidated balance sheets, statement of operations, statements of stockholders' equity and statements of cash flows, for the twelve months ended that date, which Dycom has or will have delivered to Communications and the Communications Shareholders, have been audited by Deloitte & Touche L.L.P., independent certified public accountants. Such statements present fairly the consolidated financial position of Dycom and subsidiary companies as of July 31, 1996, and the results of their operations and changes in financial position for the period ended that date, in conformity with generally accepted accounting principles consistently applied during such period. As of July 31, 1996, there were no material obligations or liabilities (whether accrued, absolute, contingent or otherwise) of Dycom and its subsidiary companies, taken as a whole, not adequately reflected in the aforesaid financial statements. Section 5.3 Capitalization. The authorized capital stock of Dycom as of the date of this Agreement consists of 50,000,000 shares of common stock, $.33 1/3 par value, of which 8,805,943 shares are issued and outstanding, and 1,000,000 shares of preferred shares, $1.00 par value, of which none are issued and outstanding. All of the shares of Dycom stock outstanding have been validly issued and are fully paid and nonassessable, and Dycom holds no such shares as treasury stock. The Dycom Shares, when delivered pursuant to this Agreement, will be validly issued and outstanding and fully paid and nonassessable. The authorized capital stock of Acquisitions consists entirely of 1000 shares of common stock, $1.00 par value, 100 of which are issued and outstanding in the name of Dycom. Acquisitions is a first tier subsidiary of Dycom. Section 5.4 Accuracy of Information. All information in writing concerning Dycom and Acquisitions furnished by Dycom and Acquisitions to Communications for inclusion in or use in preparation of, any application or statement made or to be made by Communications or the Communications Shareholders to any governmental body or private party in connection with the transactions contemplated by this Agreement, shall when furnished be true and correct in all material respects without omission of any material fact necessary to be stated to make the information not misleading. Section 5.5 Due Authorization of Dycom. The execution and delivery of this Agreement by Dycom and the performance by Dycom of its obligations under this Agreement have been authorized by its Board of Directors and no shareholder action is required. Except for the consent of the Lenders, as defined in that certain Credit 15 Facility Agreement, dated April 28, 1997, by and among Dycom and Dresdner Bank Lateinamerika Aktiengesellschaft, Miami Agency, Bank Leumi Trust Company of New York, and Republic National Bank of Miami, N.A., and subject to Section 17.1, no further consents of other parties are necessary to consummate this transaction, and Dycom will have all requisite authority to enter into this Agreement and to perform its obligations under this Agreement. Subject to the foregoing, this Agreement, when duly executed and delivered, will constitute a valid and binding agreement of Dycom, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or other similar laws of general application affecting the enforcement of creditors' rights generally. Section 5.6 Due Authorization of Acquisitions. The execution and delivery of this Agreement by Acquisitions and the performance by Acquisitions of its obligations under this Agreement have been authorized by its Board of Directors and its sole shareholder, Dycom. Subject to the foregoing, Acquisitions will have all requisite authority to enter into this Agreement and to perform its obligations under this Agreement. Subject to the foregoing, this Agreement, when duly executed and delivered, will constitute a valid and binding agreement of Acquisitions, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or other similar laws or general application affecting the enforcement of creditors' rights generally. Section 5.7 This Agreement Not a Default. Subject to the accuracy of the representations of Communications and the Communications Shareholders in Article IV hereof and compliance with the terms of this Agreement, the consummation of the transactions contemplated by this Agreement, will not materially violate or result in a material breach of or constitute a material default under any statute, ordinance or government regulation, or any provision of the Articles of Incorporation or by-laws of Dycom or Acquisitions, or any provision of any indenture, mortgage, lien, lease, agreement, instrument, order, judgment, decree, or any other restriction of any kind or character to which any property of Dycom or Acquisitions is subject or by which Dycom or Acquisitions is bound, except for the consent of the Lenders, as provided in Section 5.5, which consent shall be received prior to the Effective Time. 16 Section 5.8 Broker's or Finder's Fees, etc. Except as described on Schedule 5.8 hereto, no agent, broker, investment banker, person or firm acting on behalf of Dycom or any of its subsidiaries or under the authority of any of them is or will be entitled to any broker's or finder's fee or any other commission or similar fee directly or indirectly from any of the parties hereto in connection with any of the transactions contemplated hereby. Section 5.9 Securities and Exchange Commission Filings, etc. Dycom has delivered to the Communications Shareholders true copies of Dycom's Annual Report and Form 10-K for the fiscal year ended July 31, 1996, and the 1996 Proxy Statement relating to its 1996 annual meeting of stockholders, all as filed with the Securities and Exchange Commission, and all other reports, registrations and similar filings filed by Dycom with the Securities and Exchange Commission after July 31, 1996 and all such mailings or similar communications to its stockholders. The information provided in said filings is true and correct in all material respects without omissions of any material fact necessary to be stated to make the information not misleading. There have been no material change in its assets, liabilities or products since Dycom's 10-Q for the quarter ended April 30, 1997, delivered to Communications pursuant to this Agreement. Section 5.10 Registration If Dycom receives a request signed by the Communications Shareholder stating that the Communications Shareholders propose to sell or distribute publicly in a firm underwriting up to the greater of (a) 1,000,000 or (b) fifty percent (50)% of the Dycom Shares and that the Communications Shareholders desire to have such shares registered under the Securities Act of 1933 (the "Act"), Dycom shall use its best efforts to (a) file within one hundred and twenty (120) days of such request a registration statement under the Act covering the proposed sale or distribution referred to in such notice (the "Registration Statement"), (b) cause such Registration Statement to become effective under the Act as soon as possible after the filing thereof, and (c) cause such Registration Statement to remain effective, with a prospectus at all times meeting the requirements of the Act, for so long as a prospectus may be required to be delivered pursuant to the Act. Pursuant to Section 6(a) of the Act, the officers and directors of Dycom shall sign the Registration Statement. To the extent permitted without destroying the pooling of interests as determined by the opinion of Deloitte & Touche L.L.P., Dycom shall be responsible for all costs and expenses of any such Registration Statement, including the legal, accounting and printing costs. Dycom shall also qualify such shares (at Dycom's expense) in such states as Dycom qualifies other shares included in 17 the offering. Dycom's obligations hereunder are expressly conditioned on the Communications Shareholders furnishing Dycom in writing such information concerning the Communications Shareholders and the terms of the proposed offering as Dycom shall reasonably request or require for inclusion in the Registration Statement. Section 5.11 Untrue Statements. No representation or warranty by Dycom or Acquisitions in this Agreement nor any information, statement or certificate furnished or to be furnished to Communications pursuant hereto or in connection with the transactions contemplated hereby, contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained therein not misleading. Section 5.12 No Material Adverse Change. Since July 31, 1996, there has not been (i) any material adverse change in the financial condition, business properties or assets of Dycom and its subsidiaries taken as a whole; (ii) any loss or damage to any of the properties or assets of Dycom or its subsidiaries (whether or not covered by insurance) which has materially and adversely affected Dycom or impaired the ability of Dycom to conduct its business; (iii) any other event or condition of any character which has materially and adversely affected the business of Dycom or its subsidiaries; (iv) any mortgage or pledge of any of the properties or assets of Dycom other than those disclosed in materials furnished to Communications; (v) any purchase, redemption, or other acquisition by Dycom of any shares of the stock of Dycom; or (vi) any declaration or payment of any dividend or other distribution in respect of the stock of Dycom. Neither Dycom nor any subsidiary is in material violation of any law, regulation, governmental order or judgment necessary to the conduct of its respective business which violation has a material adverse effect on the financial condition, business, properties or assets of Dycom and its subsidiaries taken as a whole. Section 5.13 Litigation. Dycom has furnished or will furnish at the time of the execution of this Agreement, to the Communications Shareholders a written description (the "Litigation List") dated the date of this Agreement, of all material civil or criminal actions, proceedings or investigations pending or threatened by or before any court, governmental agency, regulatory authority or arbitrator against Dycom and its subsidiaries or any director or officer of Dycom, in such capacity, or its subsidiaries, as either plaintiff or defendant. The Litigation List will be supplemented from time to time as necessary prior to the Closing Date. Section 5.14 Tax Returns. Dycom has filed all applicable United States, state and local tax returns required to be filed, 18 and all other material tax returns required to be filed. Dycom has paid or provided for the payment in full of all taxes due to any governmental entity, and has not executed, or agreed to execute, any waivers of any statutes of limitations on the right of any taxing authority to assess additional taxes or to contest the income or loss reported with respect to any tax period. No issues have been raised (and are currently pending) as of the date of this Agreement by the Internal Revenue Service or any other taxing authority in connection with any of the aforesaid tax returns. There are no material taxes or levies of any nature due or payable to any local, state or federal government nor shall the consummation of the transactions contemplated by this Agreement result in any such taxes or levies being due and payable. The receipts and expenditures reflected on the U.S. income tax returns (including the supporting schedules filed therewith and as a part thereof) filed by Dycom for the fiscal years ended July 31, 1994, 1995, and 1996, copies of which have been supplied (or will be promptly supplied) to the Communications Shareholders, state accurately the receipts and expenditures of Dycom and its subsidiaries, as well as the taxable income and tax deductions for the respective tax years, and the same were derived from the books and records of Dycom and its subsidiaries. Section 5.15 Continuity Acquisitions and Dycom's intent, upon the consummation of the Merger, is to continue the business of Communications, as presently conducted. ARTICLE VI Conduct of Business of Communications Prior to Effective Time Section 6.1 Normal Operation of Business. After the date of this Agreement and prior to the Effective Time, Communications and the Communications Shareholders agree that Communications: (a) will use its reasonable efforts to preserve intact its business and operate its business only in the usual, regular and ordinary manner consistent with prior practices and, to the extent consistent with such operation, will use its reasonable efforts to (i) preserve its present advantageous relationships with persons and entities having business dealings with it, and (ii) preserve all of its licenses, franchises, patents, trademarks, copyrights and other rights; (b) will maintain its properties in customary repair, order and condition, reasonable wear and use excepted, and will maintain in full force and effect insurance substantially comparable in amount and scope to that which it has as of the 19 date of this Agreement upon all of its properties and with respect to the conduct of its business; (c) will maintain its books, accounts and records in the usual, regular and ordinary manner, on a basis consistent with prior years, and will duly comply in all material respects with all laws applicable to it and to the conduct of its business; and (d) will advise Dycom of all unusual or extraordinary requests and opportunities to provide service or expand its business. Section 6.2 Restricted Acts. Without the prior written consent of Acquisitions and Dycom, Communications and the Communications Shareholders agree that, prior to the Effective Time, Communications will not: (a) cause or permit its Articles of Incorporation or its by-laws to be amended; (b) purchase, redeem or retire any shares of its capital stock; (c) merge or consolidate with, or sell any of its assets to (other than in the ordinary course of business), or purchase or otherwise acquire all or a major part of the stock or assets of, any other corporation or partnership, or in any way change the character of its business; (d) encumber or mortgage any of its property or assets or enter into any transaction or make or enter into any contract or commitment which is not in the ordinary course of business, or, other than in the ordinary course of its business, incur any obligation (contingent or otherwise) or transfer or convey any material assets or property; (e) enter into any arrangement, agreement or undertaking for, or pay or promise to pay or grant any stock option, bonus, special compensation, or general or uniform increase in rates or pay, salary or other benefits to employees or enter into any employment agreements with officers or management personnel other than as specifically contemplated by this Agreement; (f) declare or pay any dividend or make any other distribution or payment on or in respect of its stock; (g) other than in the ordinary course of business, waive any claims having value or release any rights under contracts, leases or license agreements; (h) without notifying Acquisitions and Dycom and discussing the matter with it, and other than in the ordinary course of business, bring suit, or file a complaint or be named as a party plaintiff in any suit, action or proceeding, by or before any court, governmental agency or regulatory 20 authority or before an arbitrator; or (i) organize or cause to be organized any subsidiary. Section 6.3 No Stock Issued. No increase will be made in the number of shares of the capital stock of Communications issued and outstanding, and no warrant or any other right to purchase or convert any obligation or security into shares of capital stock of Communications will be granted or issued. Section 6.4 Supplements to Lists. Until the Closing Date, Communications shall from time to time prepare and furnish to Dycom lists of schedules (individually, a "Supplemental List" or "Supplemental Schedule," respectively) which shall supplement, as the case may be, the Document List, Asset List, Litigation List, Employee List, or any other lists or schedules which Communications shall have delivered hereunder, as necessary to keep such list or schedule current and accurate. Each Supplemental List and each Supplemental Schedule shall not be deemed to change in any respect the representations and warranties given as of the date of this Agreement, provided, however, that Dycom and Acquisition's sole remedy, in the event any such Supplemental List or lists individually or collectively materially changes the original list or lists, shall be to terminate this Agreement. At the request of Dycom, Communications shall deliver to Dycom copies of any documents pertaining to the matters listed or described in any such lists or schedules. ARTICLE VII Covenants of Communications and the Communications Shareholders. Communications and the Communications Shareholders covenant as follows: Section 7.1 Right of Access and Furnishing Information. Communications will furnish to Dycom or its duly appointed representatives such access to all of the properties, books, contracts, commitments and records of Communications, and will furnish to Dycom all such documents and copies of documents and records and information with respect to the affairs of Communications and will make its officers and employees available to Dycom or such representatives for such consultation, at reasonable times, as Dycom shall from time to time reasonably request. Communications will furnish Dycom all the information concerning Communications required for inclusion in any application or statement or notice made or to be made by Dycom to any governmental body, stock exchange or essential private party in connection with the transactions contemplated by this Agreement. 21 Section 7.2 Confidentiality. Communications, the Communications Shareholders and their representatives will hold in confidence the existence and substance of this Agreement and any data and information obtained with respect to Dycom or Acquisitions or their businesses from any representative, officer, director or employee of Dycom or Acquisitions, or from any books or records of either of them in connection with this Agreement, and shall not use such data or information or disclose the same to others, except to the extent such data or information is published or is a matter of public knowledge or is required by any applicable law or regulation to be disclosed, or until the transactions contemplated hereunder shall have been consummated. If this Agreement is terminated for any reason, all written data and information obtained from Dycom or Acquisitions in connection with the Agreement shall be returned to Dycom or Acquisitions, and Communications and the Communications Shareholders will use all reasonable efforts to keep confidential any information obtained by them from Dycom or Acquisitions in connection with the Agreement unless and until such information is ascertainable from public or published information or trade sources or is otherwise a matter of public knowledge. Section 7.3 Consents. Communications shall obtain the necessary consents and approvals to the extent the same are so required, of other persons and governmental authorities to the transactions contemplated by this Agreement, to the performance by Communications of its obligations under this Agreement and to the right of the Surviving Corporation by the Merger to succeed to the rights of Communications. In the event that Communications, through its reasonable efforts, is unable to secure the necessary consents and approvals, this Agreement may be terminated. Section 7.4 Tax Liabilities In the event a review or audit of Communications' tax returns for any year prior to the Closing Date results in an assessment for additional taxes due from Communications, based upon a determination by the assessing tax authority that such additional taxes are due because of (a) a finding of fraud and/or (b) the disallowance of any deduction taken by Communications and determined to be a personal expense of either of the Communications Shareholders, the Communications Shareholders shall indemnify the Surviving Corporation for any and all taxes, including interest and penalties, if any, assessed against the Surviving Corporation. 22 ARTICLE VIII Covenants of Dycom and Acquisitions Dycom and Acquisitions covenant as follows: Section 8.1 Furnishing of Information. Dycom and Acquisitions shall furnish Communications and the Communications Shareholders all information concerning Dycom and Acquisitions required for inclusion in any application, statement or notice made by Communications or the Communications Shareholders to, or filed by Communications or the Communications Shareholders with, any governmental body in connection with the matters contemplated by this Agreement. Section 8.2 Confidentiality. Dycom, Acquisitions and their representatives will hold in confidence the existence and substance of this Agreement and any data and information obtained with respect to Communications or the business of Communications or any of the Communications Shareholders from any representative, officer, director or employee of Communications, or from any books or records of Communications in connection with this Agreement, and shall not use such data or information or disclose the same to others, except to the extent such data or information is published or is required by any applicable law, rule or regulation including, without limitation, the Securities Exchange Act of 1934 and the rules of any stock exchange, to be disclosed, or until the transaction contemplated hereunder shall have been consummated. If this Agreement is terminated for any reason, all written data and information obtained by Dycom or Acquisitions from Communications in connection with this Agreement shall be returned to Communications, and Dycom and Acquisitions will use all reasonable efforts to keep confidential any information obtained by them unless and until such information is ascertainable from public or published information or trade sources or is otherwise a matter of public knowledge. Dycom and Acquisitions shall notify and discuss beforehand with the Communications Shareholders disclosure with respect to this Agreement that Dycom or Acquisitions makes to the news media. Section 8.3 Personal Guaranties. Dycom agrees to use its best efforts to remove and replace the Communications Shareholders as personal guarantors of lines of credit of Communications. Communications Shareholders warrant that there are no amounts in excess of $5,337,456.76 due under such lines of credit as of the date hereof. If Dycom is unsuccessful in removing and replacing the Communications Shareholders as guarantors, Dycom agrees to indemnify Communications Shareholders for any claims made on such guaranty agreements. 23 Section 8.4 Loans to Communications Shareholders. Dycom shall satisfy or cause Communications to satisfy all loans or amounts payable by Communications to the Communications Shareholders, if any, within eight (8) months after the Closing Date. Communications Shareholders warrant that the total of the debts due Communications Shareholders as of the date hereof does not exceed $670,000. Section 8.5 Securities and Exchange Commission Filings, etc. Until the Closing Date, Dycom shall furnish to Communications and the Communications Shareholders promptly after such filings or communications are made, copies of any reports, statement or other filings filed by it with the Securities and Exchange Commission and the New York Stock Exchange and all mailings or similar communications to its stockholders. Section 8.6 Stock Transfer Taxes. Dycom shall pay any and all documentary stamp taxes, transfer taxes or other stock issued taxes of any kind due upon any issue, exchange or transfer of the Dycom Shares in connection with this Agreement. ARTICLE IX Transferability of Dycom Shares Section 9.1 Share Certificate Legend. Each certificate evidencing the Dycom Shares shall bear a legend to disclose the limitations upon its transferability by virtue of the requirements of the Securities Act of 1933, as amended. The aforesaid legend shall read as follows: THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT") IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION PROVIDED IN SECTION 4(2) OF THE ACT, NOR WITH ANY STATE SECURITIES REGULATORY AUTHORITY IN RELIANCE UPON PARTICULAR STATUTORY TRANSACTIONAL EXEMPTIONS. IT IS UNLAWFUL TO CONSUMMATE A SALE OR OTHER TRANSFER OF THESE SECURITIES WITHOUT PRIOR REGISTRATION UNDER THE ACT AND APPLICABLE STATE STATUES OR RECEIPT OF AN OPINION OF COUNSEL FOR THE ISSUER TO THE EFFECT THAT SUCH PROPOSED SALE OR OTHER TRANSFER DOES NOT AFFECT THE EXEMPT STATUS OF THE ORIGINAL ISSUANCE AND SALE OF THIS SECURITY AND IS IN COMPLIANCE WITH ALL APPLICABLE FEDERAL AND STATE SECURITIES LAWS. Dycom shall make a notation in its records of the foregoing 24 limitations on transferability, and shall so advise its transfer agent. The foregoing legend shall be removed from a certificate representing shares covered by an effective registration statement under the Securities Act of 1933 or shares as to which, in the opinion of Chopin, Miller & Yudenfreund, or other counsel satisfactory to Dycom, such registration is not required, and any stop transfer instructions with the transfer agent will be revoked promptly. Section 9.2 Subsequent Sale of Securities. The Communications Shareholders acknowledge that the Dycom Shares to be delivered at the Closing will not have been registered under the Securities Act of 1933, as amended, or under any state securities act, in reliance upon the applicable federal or state exemption for private offerings, and the Communications Shareholders agree and covenant that the shares to be received by them at the Closing are being acquired solely for their own account, for investment and not with a view to the sale or distribution thereof. ARTICLE X Conditions Precedent to Obligations of Dycom and Acquisitions All obligations of Dycom and Acquisitions hereunder are subject to the fulfillment (unless specifically waived in writing by Dycom and Acquisitions subsequent to the execution of this Agreement) of each of the following conditions at or before the Closing Date: Section 10.1 Warranties True. All representations and warranties of Communications and the Communications Shareholders contained in this Agreement shall in all material respects be true on, and with the same force and effect as though made on, the Closing Date, except for changes permitted by this Agreement. Section 10.2 No Loss or Calamity. Communications shall not have suffered, at or prior to the Closing Date, on account of any cause whatsoever, any loss which materially and adversely affects the value of its assets or business (whether or not such loss shall have been insured). Section 10.3 Communications' and the Communications Shareholders' Performance. Communications and the Communications Shareholders shall have performed in all material respects all obligations and agreements required of them and complied with all covenants applicable to them as contained in this Agreement, to be performed and complied with by them on or prior to the Closing Date. 25 Section 10.4 Good Standing. There shall have been delivered to Dycom and Acquisitions evidence, whether in the form of telegrams, certificates or otherwise, satisfactory to Dycom and Acquisitions to establish that Communications is in subsistence (i) in the state of its incorporation; and (ii) in every jurisdiction, in which the character and location of its assets or the nature of the business transacted by it requires that it be qualified to do business. Section 10.5 Opinion of Counsel for Communications and the Communications Shareholders. Dycom and Acquisitions shall have been furnished with an opinion, dated the Closing Date, of Kelley and Murphy, counsel for Communications and the Communications Shareholders, to the effect that: (i) Communications is a validly organized and existing corporation in subsistence under the laws of the Commonwealth of Pennsylvania. Communications is duly qualified and in good standing as a foreign corporation authorized to do business in each jurisdiction where, because of the nature of its business or properties, such qualification is required, except where the failure to be so qualified and in good standing would not have a material or adverse affect on the financial condition, business properties or assets of Communications. Communications has all requisite corporate power under its statutes and articles to carry on its business as then being conducted; (ii) The authorized capital stock of Communications consists of 1000 shares of common stock, $1.00 par value, of which 140 shares are issued and outstanding and 2000 shares of preferred stock, $25.00 par value, all of which are issued and outstanding. All such outstanding shares have been duly and validly authorized and issued and are fully paid and nonassessable; (iii) The execution, delivery and performance of this Agreement by Communications have been duly and validly authorized by its Board of Directors and approved by all of its shareholders in compliance with Pennsylvania law and its Articles of Incorporation and by-laws, and this Agreement constitutes the valid and binding obligation of Communications and the Communications Shareholders, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or other similar laws of general application affecting the enforcement of creditors' rights generally; (iv) All consents or approvals (including authorizations or orders of any private person, entity or governmental body) required for Communications or the Communications Shareholders 26 to enter into and perform this Agreement and the transactions contemplated hereby, and all supplements thereto, have been obtained; (v) All other actions and proceedings required by law to be taken by Communications and the Communicating Shareholders at or prior to the Closing Date in connection with this Agreement and the transactions provided for herein have been duly and validly taken; (vi) Except as may be specified by such counsel, they do not know after inquiry of Communications and the Communications Shareholders, of any material litigation, proceeding or governmental investigation pending or threatened against or relating to Communications, or any properties or business, or any litigation, proceeding or governmental investigations, pending or threatened, relating to the transactions contemplated by this Agreement; (vii) The execution, delivery and performance of this Agreement by Communications and the Communications Shareholders will not materially violate or result in a material breach of or constitute a material default under any provision of Communications' Articles of Incorporation or by-laws, or any indenture, mortgage, lien, lease agreement, instrument, order, judgment decree, or any other restriction of any kind or character to which any property of Communications is subject or bound; and (viii) The Articles of Merger referred to in Section 1.2 has been duly executed by Communications in accordance with Pennsylvania law. To the best of counsel's knowledge, upon the filing of the Articles of Merger with the Department of State of the Commonwealth of Pennsylvania, the Merger will become effective as provided in the Articles of Merger. Each share of Communications capital stock issued and outstanding immediately prior to the Effective Time will, at the effective time stated in the Articles of Merger with the Department of State of the Commonwealth of Pennsylvania, automatically and without any action on the part of the holder thereof, be converted into the Dycom Shares as provided in Article II hereof. In rendering such opinions, such counsel may rely, as to factual matters, upon certificates required by Section 10.4 hereof as well as any other certificates such counsel may request to be furnished by officers, directors, or shareholders of Communications and upon such other documents and data as such counsel deem appropriate as a basis for its opinion. Such counsel may state that they are admitted to practice only in the Commonwealth of Pennsylvania, that they are not admitted to the Bar in any other 27 state and are not expert in the law of any other state, and that to the extent their opinion concerns the laws of any other state, such counsel has relied upon the opinion of counsel reasonably satisfactory to such counsel who are admitted to practice in such state. Section 10.6 Communications Shares. The Communications Shares shall be free and clear of all claims and encumbrances whatsoever. Section 10.7 Absence of Litigation. There shall not be any actual or threatened action, proceeding or investigation which is directed towards challenging, restraining, prohibiting or invalidating the Merger or which, in the reasonable judgment of Dycom or Acquisitions, could affect the right of the Surviving Corporation to own, operate or control after the Effective Time any material part of the property or business of Acquisitions or Communications. Section 10.8 Employment Agreement. Communications and the Communications Shareholders shall have terminated by mutual agreement any existing employment agreement(s) between them, and the Communications Shareholders shall have entered into employment agreements with Communications in the form and substance attached hereto as Exhibits "B.1" and "B.2" for each such shareholder, respectively. Section 10.9 Environmental Indemnity etc. Communications and Communications Shareholders shall have furnished to Dycom and Acquisitions copies of any and all presently existing environmental, audits, reports or studies within their possession or control regarding any real estate owned, operated, possessed, or used by Communications on or before the Effective Time and, thereafter, also provide Dycom and Acquisitions copies of any such audits, reports or studies. Communications Shareholders shall have executed an indemnity in favor of Dycom whereby the Communications Shareholders, jointly and severally, indemnify and hold Dycom and the Surviving Corporation harmless from and against any losses, claims, damages, liabilities, and necessary costs and expenses, including, without limitation, reasonable legal, consulting, engineering and other expenses and any fines or penalties, arising out of or in connection with any Environmental Conditions which existed as of and/or prior to the Closing Date and which are the result of Communications' activities and not those of its predecessors in title or interests or other third parties. Losses shall include losses, claims, damages, liabilities, and necessary costs and expenses, including, without limitation, reasonable legal, consulting, engineering and other expenses which may be incurred by Dycom or the Surviving Corporation resulting from claims for damages for bodily injury or property damages which 28 arose out of or in connection with any Environmental Conditions which existed as of and/or prior to the Closing Date and which were the result of Communications' activities. Losses shall also include all costs incurred to remedy to the satisfaction of any governmental authority, any Environmental Conditions which existed as of and/or prior to the Closing Date and which were the result of Communications' activities. For purposes of this Section 10.9, "Environmental Conditions" shall mean any conditions that requires remedial action and/or may result in claims, demands and liabilities to the Communications Shareholders or the Surviving Corporation with respect to the alleged generation, emission, storage, disposal, discharge or release or threatened release of Hazardous Substances into soil, surface waters, ground waters, streams, ponds, basins or lagoons, wherever located. For these purposes, "Hazardous Substances" shall mean any pollutants or contaminants, toxic substances, hazardous wastes, or hazardous substances (as defined in or pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq., as amended, and the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601 et seq., as amended), and petroleum products. ARTICLE XI Conditions Precedent to Obligations of Communications and the Communications Shareholders All obligations of Communications and the Communications Shareholders hereunder are subject to the fulfillment (unless specifically waived in writing by Communications and the Communications Shareholders subsequent to the execution of this Agreement) of each of the following conditions at or before the Closing Date. Section 11.1 Warranties True. All representations and warranties of Dycom and Acquisitions contained in this Agreement shall in all material respects be true on, and with the same force and effect as though made on, the Closing Date except for changes permitted by this Agreement. Section 11.2 No Loss or Calamity. Neither Dycom nor Acquisitions shall have suffered, at or prior to the Closing Date, on account of any cause whatsoever, any loss which materially and adversely affects the value of its assets or business (whether or not such loss shall have been insured). Section 11.3 Performance by Dycom and Acquisitions. Dycom and Acquisitions shall have performed in all material respects all obligations and agreements and complied with all covenants 29 contained in this Agreement, to be performed and complied with by it at or prior to the Closing Date. Section 11.4 Certificate of Officer. Dycom and Acquisitions shall deliver to Communications a certificate of their President certifying to the matters contained in Sections 11.1, 11.2 and 11.3. Section 11.5 Opinion of Counsel for Dycom and Acquisitions. Communications and the Communications Shareholders shall have been furnished with an opinion, dated the Closing Date, of Chopin, Miller & Yudenfreund, counsel for Dycom and Acquisitions, to the effect that: (i) Dycom and Acquisitions are validly organized and existing corporations in good standing under the laws of the Florida and Pennsylvania, respectively. Each has all requisite corporate power to carry on its respective business as then conducted and is qualified to do business in every jurisdiction in which the character and location of its assets or the nature of the business transacted by it requires such qualification except where the failure to be so qualified and in good standing would not have a material and adverse effect on the financial condition, business, properties or assets of Dycom, its subsidiaries and Acquisitions taken as a whole. Dycom and Acquisitions each has all requisite power under its Articles of Incorporation to carry on its business as then being conducted. (ii) The authorized stock of Dycom consists of 50,000,000 shares of common stock, $.33 1/3 par value, of which 8,805,943 shares are issued and outstanding, and 1,000,000 shares of preferred stock, $1.00 par value, of which none are issued and outstanding. The authorized stock of Acquisitions consists of 1,000 shares of common stock, $1.00 par value, of which 100 shares are issued and outstanding and held by Dycom. All of the issued common stock of Dycom and Acquisitions has been duly and validly authorized and issued and is fully paid and nonassessable. (iii) The execution, delivery and performance of this Agreement by Dycom and the issuance by Dycom of the Dycom Shares as contemplated by this Agreement, have been duly and validly authorized and approved by its Board of Directors, as required by any applicable laws, regulation, or articles of incorporation, by-laws or agreement, and no further proceedings of each of Dycom and Acquisitions are required therefor; and this Agreement constitutes a valid and binding obligation of Dycom and Acquisitions except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or other similar laws of general 30 application affecting the enforcement of creditors' rights generally. (iv) The Dycom Shares to be delivered to the Communications Shareholders pursuant to this Agreement, when delivered, will be duly authorized and validly issued and outstanding and fully paid and nonassessable. (v) All consents and approvals required for Dycom or Acquisitions to enter into and perform this Agreement and the transactions contemplated hereby have been obtained. (vi) All other actions and proceedings required by law to be taken by each of Dycom and Acquisitions at or prior to the Closing Date in connection with this Agreement and the transactions provided for herein have been duly and validly taken. (vii) Neither the execution, delivery and performance of this Agreement by either Dycom or Acquisitions, nor the issuance of the Dycom Shares pursuant hereto, will materially violate or result in a material breach of or constitute a material default under any provision of each of Dycom's or Acquisitions's Articles of Incorporation or by-laws, or, to the best knowledge of such counsel after due investigation, any indenture, mortgage, lien, lease, agreement, instrument, order, judgment, decree or any other restriction of any kind or character to which any property of each of Dycom and Acquisitions is subject or by which each of Dycom and Acquisitions is bound. (viii) Except as may be specified by such counsel, they do not know after inquiry of each of Dycom and Acquisitions of any material litigation, proceeding or governmental investigation pending or threatened against or relating to each of Dycom and Acquisitions, its properties or business, or any litigation, proceeding or governmental investigation, pending or threatened, relating to the transactions contemplated by this Agreement. (ix) The Articles of Merger referred to in Section 1.2 has been duly executed by Acquisitions in accordance with Pennsylvania law. To the best of counsel's knowledge, upon the filing of the Articles of Merger with the Secretary of the Commonwealth of Pennsylvania, the Merger will be effective as provided in the Articles of Merger. Each share of Communications capital stock issued and outstanding immediately prior to the Effective Time will, at the effective time stated in the Articles of Merger, automatically and without any action on the part of the holders thereof, be converted into the Dycom Shares as provided in Article II hereof. 31 In rendering such opinions, such counsel may rely on the certificates delivered under Section 11.4 and as to factual matters upon certificates furnished by officers or directors of Dycom or Acquisitions or by government officials, and upon such other documents and data as such counsel deem appropriate as a basis for their opinion. Such counsel may state that they are admitted to practice only in the States of Florida, Louisiana, Georgia and Connecticut, that they are not admitted to the Bar in any other state and are not experts in the law of any other state, and that to the extent their opinions concern the laws of any other state such counsel has relied upon the opinion of counsel reasonably satisfactory to such counsel who are admitted to practice in such state. Section 11.6 Absence of Litigation. There shall not be any actual or threatened action, proceeding or investigation which is directed towards, restraining, prohibiting or invalidating this Merger. Section 11.7 Employment Agreement. Communications shall have entered into a separate employment agreement with the Communications Shareholders, respectively, in the form and substance attached hereto as Exhibits "B.1" and "B.2." Section 11.8 Release. Communications and the Communications Shareholders shall execute a release in the form attached hereto as Exhibit "C." Section 11.9 Consents. The consents of the Board of Directors of Dycom, the Board of Directors of Acquisitions, and the Lenders, as provided in Section 5.5 hereof, shall be delivered to the Communications Shareholders. Section 11.10 PNC and Comcast Cable Communications, Inc. shall have consented to the Merger on or before the Closing Date. ARTICLE XII EXPENSES Section 12.1 Parties to Pay Own Expenses. Dycom, Communications, Acquisitions and the Communications Shareholders will pay their respective expenses, if any, incurred in connection with the transactions contemplated by this Agreement. ARTICLE XIII TERMINATION AND AMENDMENT Section 13.1 Termination. This Agreement may be terminated without liability, at any time prior to the Closing, only on the following conditions or occurrences: 32 (a) by the joint agreement of Dycom, Acquisitions, Communications and the Communications Shareholders; (b) by Dycom and Acquisitions, if they have not received an opinion by Deloitte & Touche L.L.P. that the Merger will qualify as a pooling of interests; (c) by Dycom and Acquisitions or Communications and the Communications Shareholders, if the Closing shall not have been consummated on or before July 31, 1997, unless adjourned to a later date by mutual consent in writing; or (d) by Dycom and Acquisitions, if any matters come to their attention relating to the business of Communications which could materially and adversely affect the financial condition, business, properties or assets of Communications; provided, however, that an adverse change or effect which results only from a general decline in economic or industry conditions not related specifically to Communications will not be deemed to be an event included in or contemplated by this paragraph. (e) by Communications or the Communications Shareholders, if any matters come to their attention relating to the business of Dycom which could materially and adversely affect the financial condition, business, properties or assets of Dycom; provided, however, that an adverse change or effect which results only from a general decline in economic or industry conditions not related specifically to Dycom will not be deemed to be an event included in or contemplated by this paragraph. Section 13.2 Amendment. Dycom, Acquisitions, Communications and the Communications Shareholder may, in a writing signed and duly authorized by all of them, amend, modify or supplement this Agreement at any time. ARTICLE XIV Binding Agreement Section 14.1 Succession. All terms, covenants, representations, warranties and conditions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. Section 14.2 Assignment. Dycom shall not be permitted to assign its interest in this Agreement. 33 ARTICLE XV Survival of Warranties Section 15.1 Except as otherwise provided in the Agreement, all representations, warranties and covenants of the parties made herein or in connection herewith shall survive the Closing for a period of one year. Those contained in Sections 9.1, 9.2 and 18.8 shall not be limited in term, those contained in Section 8.1 shall survive for five years, and those made by Communications and the Communications Shareholders which (a) relate to tax or environmental matters or (b) are contained in Section 4.22 shall survive for the greater of, in each case, five years or the expiration of all statutes of limitations applicable with respect thereto. ARTICLE XVI Dycom Directorship Section 16.1 Subject to the provisions hereof, George Tamasi shall have the right to nominate a person, including himself, to be a member of Dycom's Board of Directors. Any such nominee shall by subject to approval by Dycom and, in the event required by Dycom's Articles of Incorporation and/or by-laws, to the approval of Dycom shareholders. The right to propose a nominee for Dycom's Board of Directors, as provided in this Article, shall be exercisable only (a) after the expiration of six (6) months following the Closing Date, (b) during the initial term of George Tamasi's employment agreement, and (c) while George Tamasi remains record owner of 250,000 Dycom shares acquired by him as a result of the Merger or otherwise. ARTICLE XVII HART-SCOTT-RODINO ACT FILING Section 17.1 The parties will file all required notification and report forms pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "Hart-Scott-Rodino Act") and they will promptly respond to all requests for additional information made by either the Federal Trade Commission ("FTC") or the Department of Justice. Each party will notify the other party and their counsel promptly of any requests for additional information, comments or questions by the FTC or the Antitrust Division of the U.S. Department of Justice ("Antitrust Division") as to such filings and will promptly keep the other informed with respect to filings and communications between a party or its 34 representatives, on the one hand, and the FTC or the Antitrust Division, on the other hand, with respect to this Agreement or the transactions contemplated hereby. ARTICLE XVIII Notices and Provisions of General Application Section 18.1 Limitations for Breach or Pursuant to Indemnity. Notwithstanding anything contained herein to the contrary, the Communications Shareholders' liability for any breach of warranty or covenant or pursuant to any indemnity given under this Agreement shall be limited to the extent that such liabilities exceed $375,000.00, and in no event shall Communications Shareholders' liability exceed $2,800,000.00. The limitation of liability set forth in this section shall be applicable to any and all causes of action. Section 18.2 Notices. All notices, requests, waivers and other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, given by prepaid telegram or mailed registered or certified first-class mail, postage prepaid, as follows: If to Communications or Communications Shareholders: Mr. George Tamasi Mr. Thomas Polis c/o Communications Construction Group, Inc. 235 East Gay Street P.O. Box 561 West Chester, PA 19380 with copies to: Joseph T. Kelley, Jr., Esquire Kelley and Murphy Union Meeting Corporate Center V 925 Harvest Drive, Suite 160 Blue Bell, PA 19422 35 If to Dycom and/or Acquisitions: Mr. Thomas R. Pledger Dycom Industries, Inc. First Union Center 4440 PGA Boulevard, Suite 600 Palm Beach Gardens, FL 33410 with copies to: L. Frank Chopin, Esquire Chopin, Miller & Yudenfreund 440 Royal Palm Way, Suite 200 Palm Beach, Florida 33480 Section 18.3 Place of Closing, Closing Date. The Closing shall take place at the Palm Beach, Florida offices of Chopin, Miller & Yudenfreund on July 31, 1997, or at such other place, and at such time, as the parties may mutually agree. The date of Closing is herein called the "Closing Date." At Closing, the parties to this Agreement will exchange certificates, opinions and other documents in order to determine whether the terms and conditions of this Agreement required to be satisfied at or prior thereto have been satisfied. If the terms and conditions required to be satisfied have been so satisfied, the surrender and exchange of certificates representing the Communications Shares and Dycom common stock shall occur as provided in Section 2.2 hereof and the Articles of Merger, theretofore duly executed, shall be filed with the Department of State of the Commonwealth of Pennsylvania, pursuant to Pennsylvania law, in order to consummate the Merger. Section 18.4 Entire Understanding. This Agreement constitutes the entire agreement and supersedes all prior agreements, both written and oral, among the parties hereto with respect to the subject matter hereof. Section 18.5 Waivers. The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect its right at a later time to enforce the same. No waiver by any party of any condition or of any breach of any term, covenant, representation or warranty contained in this Agreement shall be effective unless in writing, and no waiver in any one or more instances shall be deemed to be a further or continuing waiver of any such condition or breach in 36 other instances or a waiver of any other condition or breach of any other term, covenant, representation or warranty. Section 18.6 Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Section 18.7 Headings. The headings preceding the text of Sections of this Agreement are for convenience only and shall not be deemed part of this Agreement. Section 18.8 Applicable Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Florida. Section 18.9 Attorney's Fees. In the event any party shall be required to file suit or otherwise retain counsel to enforce or assist in the enforcement of any of the terms of this Agreement or to recover damages for the breach of this Agreement, the prevailing party shall be entitled to recover attorney's fees and costs incurred at all levels of proceedings. This provision shall survive the Closing. 37 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written. ATTEST: COMMUNICATIONS CONSTRUCTION GROUP, INC. /s/ Thomas Polis By: /s/ George Tamasi Its: President (Corporate Seal) COMMUNICATIONS SHAREHOLDERS /s/ George Tamasi GEORGE TAMASI, Individually /s/ Thomas Polis THOMAS POLIS, Individually ATTEST: DYCOM INDUSTRIES, INC. By: /s/ Thomas R. Pledger /s/ Patricia B. Frazier Its: Chairman & CEO (Corporate Seal) ATTEST: DYCOM ACQUISITIONS, INC. By: /s/ Thomas R. Pledger /s/ Patricia B. Frazier Its: Chairman & President (Corporate Seal) EX-99 3 EXHIBIT 99(II) 1 AMENDMENT TO AGREEMENT AND PLAN OF MERGER This Amendment to that certain Agreement and Plan of Merger dated July 7, 1997 ("Agreement") is entered into as of the 29th day of July, 1997 by and among Communications, Dycom, Acquisitions, and George Tamasi and Thomas Polis, the owners of record of all of the issued and outstanding stock of Communications. Except as otherwise specified herein, capitalized terms used herein which are defined in the Agreement shall have the respective meanings ascribed thereto herein. W I T N E S S E T H WHEREAS, the parties to this Amendment have signed the Agreement which provides that Acquisitions shall be merged into Communications, with Communications being the Surviving Corporation; and WHEREAS, the parties are desirous of modifying certain provisions of the Agreement by this Amendment. NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties herein contained, the parties hereto agree to amend the Agreement in the following respects: A. Section 1.2 of the Agreement shall be amended by striking the language "12:00 midnight on July 31, 1997 (the "Effective Time"), unless the Articles of Merger are filed subsequent to July 31, 1997, in which event the merger shall be effective at", and inserting "("Effective Time")" after the first reference to Pennsylvania. 2 B. Section 8.4 of the Agreement shall be deleted in its entirety and inserted in lieu thereof shall be the following: At Closing, Dycom shall issue an additional 21,538 shares of Dycom common stock to each of the Communications Shareholders in satisfaction of the $600,000 shareholder loan (including any interest or other charges due in connection with the same) reported in Communications' financial statements for the fiscal year ended May 31, 1997. Each such additional share shall bear the legend provided in Section 9.1 of the Agreement. The Communications Shareholders' acknowledgment provided in Section 9.2 of the Agreement shall also apply with respect to such additional shares. Any and all representations, warranties and covenants made in the Agreement with respect to the Dycom Shares shall also apply with respect to such additional shares. The original of the notes and other evidence of such shareholder loans shall be appropriately marked to indicate payment and the same shall be delivered to Dycom on the Closing Date. C. Sections 10.8 and 11.7 of the Agreement shall be amended by striking the language "attached hereto as Exhibits 'B.1' and 'B.2'" and inserting in lieu thereof "attached to the Amendment as Exhibits 'B.1A' and 'B.2A'." D. Section 11.8 of the Agreement shall be amended by striking the language "attached hereto as Exhibit 'C'" and inserting in lieu thereof "attached to the Amendment as Exhibit C-1." 3 E. Section 15.1 of the Agreement shall be amended by striking the language "or environmental" from the second sentence. F. Except as modified by this Amendment, the Agreement shall remain in full force and effect. G. This Amendment may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 4 IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the date first above written. ATTEST: COMMUNICATIONS CONSTRUCTION GROUP, INC. /S/ Thomas Polis By: /s/ George Tamasi Its: President (Corporate Seal) COMMUNICATIONS SHAREHOLDERS /s/ George Tamasi GEORGE TAMASI, Individually /s/ Thomas Polis THOMAS POLIS, Individually ATTEST: DYCOM INDUSTRIES, INC. By: /s/ Thomas R. Pledger /s/ Patricia B. Frazier Its: Chairman & CEO (Corporate Seal) ATTEST: DYCOM ACQUISITIONS, INC. By: /s/ Thomas R. Pledger /s/ Patricia B. Frazier Its: Chairman & President (Corporate Seal) EX-99 4 EXHIBIT 99(III) Microfilm Number Filed with the Department of State on Entity Number Secretary of the Commonwealth ARTICLES OF MERGER - DOMESTIC BUSINESS CORPORATION DSCB:15-1926 (Rev. 90) In compliance with the requirements of 15 Pa.C.S. 1926 (relating to articles of merger or consolidation), the undersigned business corporations, desiring to effect a merger, hereby state that: 1. The name of the corporation surviving the merger is: Communications Construction Group, Inc. 2. (Check and complete one of the following): X The surviving corporation is a domestic business corporation and the (a) address of its current registered office in the Commonwealth or (b) name of its commercial registered office provider and the county of venue is (the Department is hereby authorized to correct the following information to conform to the records of the Department): (a) 235 East Gay Street West Chester PA 19380 Chester Number and Street City State Zip County (b) c/o Name of Commercial Registered Office Provider County For a corporation represented by a commercial registered office provider, the county in (b) shall be deemed the county in which the corporation is located for venue and official publication purposes. 2 The surviving corporation is a qualified foreign business corporation incorporated under the laws of and the (a) address of its current registered office in this Commonwealth or (b) name of its commercial registered office provider and the county of venue is (the Department is hereby authorized to correct the following information to conform to the records of the Department): (a) N/A Number and Street City State Zip County (b) c/o Name of Commercial Registered Office Provider County For a corporation represented by a commercial registered office provider, the county in (b) shall be deemed the county in which the corporation is located for venue and official publication purposes. The surviving corporation is a nonqualified foreign business corporation incorporated under the laws of and the address of its principal office under the laws of such domiciliary jurisdiction is: N/A Number and Street City State Zip County 3. The name and the address of the registered office in this Commonwealth or name of its commercial registered office provider and the county of venue of each other domestic business corporation and qualified foreign business corporate which is a party to the plan of merger are as follows: Name of Corporation Address of Registered Office or Name County of Commercial Registered Office Provider Communications Construction 235 East Gay Street Chester Group, Inc. West Chester, PA 19380 Dycom Acquisitions, Inc. CT Corporation System Chester 3 4. (Check, and if appropriate complete, one of the following): X The plan of merger shall be effective upon filing these Articles of Merger in the Department of State. The plan of merger shall be effective on Date at . Hour 5. The manner in which the plan of merger was adopted by each domestic corporation is as follows: Name of Corporation Manner of Adoption Communications Construction Approval of Shareholders Group, Inc. Dycom Acquisitions, Inc. Approval of Shareholder 6. Strike out this paragraph if no foreign corporation is a party to the merger). The plan was authorized, adopted and approved, as the case may be, by the foreign business corporation (or each of the foreign business corporations) party to the plan in accordance with the laws of the jurisdiction in which it is incorporated. 7. (Check, and if appropriate complete, one of the following): The plan of merger is set forth in full in Exhibit A attached hereto and made a part hereof. X Pursuant to 15 Pa.C.S. 1901 (relating to omission of certain provisions from filed plans) the provisions, if any, of the plan of merger that amend or constitute the operative Articles of Incorporation of the surviving corporation as in effect subsequent to the effective date of the plan are set forth in full in Exhibit A attached hereto and made a part hereof. The full text of the plan of merger is on file at the principal place of business of the surviving corporation, the address of which is: 235 East Gay Street West Chester PA 19380 Chester Number and Street City State Zip County 4 IN TESTIMONY WHEREOF, the undersigned corporation or each undersigned corporation has caused these Articles of Merger to be signed by a duly authorized officer thereof this day of , 1997. COMMUNICATIONS CONSTRUCTION GROUP, INC. By: /s/ George Tamasi Title: President DYCOM ACQUISITIONS, INC. By: /s/ Thomas R. Pledger Title: President 5 EXHIBIT 'A' OPERATIVE PROVISIONS OF RESTATED ARTICLES OF INCORPORATION OF SURVIVING CORPORATION FIRST. The name of the corporation is: Communication Construction Group, Inc. SECOND. The name of the corporation's commercial registered office provider and county of venue is: C T Corporation System Chester County THIRD. The corporation is incorporated under the provisions of the Business Corporation Law of 1933, as amended by the Business Corporation Law of 1988, Act of December 21, 1988 (P.L. 144, no. 177). PURPOSE. The purpose of the corporation is and it shall have unlimited power to engage in and to do any lawful act concerning any and all lawful business for which corporations may be incorporated under such Act. FOURTH. The term of the corporation's existence is perpetual. FIFTH. The aggregate number of shares of capital stock which the corporation shall have authority to issue is One Thousand (1,000) shares of common stock, One Dollar ($1.00) par value. EX-99 5 EXHIBIT 99(IV) 1 EMPLOYMENT AGREEMENT This Employment Agreement is made this 29th day of July, 1997, between George Tamasi ("Employee"), Communications Construction Group, Inc. ("Employer") and Dycom Industries, Inc. ("Dycom"). 1. Employment and Board of Directors. Subject to the terms and conditions hereof, Employer hereby agrees to continue to employ Employee as Employer's President and Chief Executive Officer to perform such specific duties and have such responsibilities as Employer's Board of Directors may from time to time establish; provided, however, that such duties shall be consistent with the duties and responsibilities typically accorded to a president and chief executive officer. Employee hereby accepts continued employment by Employer as President and Chief Executive Officer of Employer, subject to the terms and conditions hereof, and agrees to continue to devote his full time and attention to his duties hereunder, to the best of his abilities consistent with prior practice. The Board of Directors of Employer shall be four (4) in number, consisting of Employee, Thomas Polis, Thomas R. Pledger and Steven E. Nielsen, who shall each have one (1) vote. 2. Term of Employment. Employee's employment pursuant to this Employment Agreement shall commence on the date hereof and shall terminate upon the earlier of (a) termination pursuant to paragraph 5 hereof or (b) five (5) years from the date hereof, unless terminated by mutual agreement of the parties hereto after the first three years (3) of employment. 3. Compensation, Benefits and Expenses. (a) At the commencement of this Employment Agreement, Employee shall be paid a base annual salary of $260,000. Payment will be made on the regularly scheduled pay dates of the Employer, subject to all appropriate withholdings or other deductions required by law or by Employer's established policies applicable to all employees of the Employer. Employer may increase Employee's salary at Employer's sole discretion, but shall not reduce such salary below the rate established by this Employment Agreement without Employee's written consent. 2 (b) During the term of employment, Employer shall provide Employee with all the benefits and perquisites without limitation, that Employee received from Employer prior to its acquisition by Dycom. (c) In addition to any other compensation payable to Employee pursuant to this Employment Agreement, Employee during the term of this Employment Agreement may be paid an annual bonus as determined by and within the sole discretion of Dycom's Board of Directors. (d) Employee's services hereunder shall be performed at the principle offices of the Employer in West Chester, Pennsylvania and West Palm Beach, Florida, subject to such reasonable travel as the performance of Employee's duties and the business of Employer may require consistent with prior practice. (e) In addition to compensation payable to Employee as described above, Employee shall be entitled to participate in all employee benefit plans or programs of Employer as are available to management employees of Employer generally and such other benefit plans or programs as may be specified by the Employer's Board of Directors, including any stock options that may be granted by the Board of Directors of Dycom. Employer hereby waives Employee's waiting period for eligibility under its medical benefits plan. (f) On a timely basis, Employer shall reimburse Employee for such reasonable out-of-pocket expenses as Employee may incur for and on behalf of the furtherance of Employer's business, provided that Employee submits to Employer satisfactory documentation or other support for such expenses in accordance with Employer's expense reimbursement policy. 4. Covenants of Employee. (a) During the term of this Employment Agreement, Employee shall not directly or indirectly engage in any business, whether as a proprietor, partner, joint venturer, employer, agent, employee, consultant, officer or beneficial or record owner of more than one percent of the stock of any corporation or association of any nature which is competitive to the business conducted by Employer, Dycom, or any of Dycom's other wholly owned subsidiaries. (b) During the term of this Employment Agreement, Employee will not divulge or appropriate to Employee's own use or to the use of others any trade secrets or confidential information or confidential knowledge pertaining in any to the business of Employer, Dycom or any of Dycom's other wholly owned subsidiaries. (c) In the event Employee breaches this Employment Agreement or if Employee's employment is terminated pursuant to paragraph 5(a) of this Employment Agreement, and Employer and/or Dycom has not breached this Employment Agreement or any other 3 agreement with Employee, Employee separately agrees, being fully aware that the performance of this Employment Agreement is important to preserve the present value of the property and business of Employer and Dycom, that for the greater of (i) twelve (12) calendar months following the date of such termination or (ii) the unexpired portion of the first three (3) years of this Employment Agreement, Employee shall not directly or indirectly engage in any business, whether as proprietor, partner, joint venturer, employer, agent, employee, consultant, officer or beneficial or record owner of more than one percent of the stock of any corporation or association of any nature which is competitive to the business conducted by Employer or any of Dycom's other wholly owned subsidiaries in the current geographical service area of Employer or in any other geographical service area of Employer or any of Dycom's other wholly owned subsidiaries during the term of Employee's employment. Within such geographical service areas and during such non-compete period, Employee shall not solicit or do business competitive to the business conducted by Employer or any of Dycom's other wholly owned subsidiaries, with any customers, partners or associates of Employer or any of Dycom's other wholly owned subsidiaries. (d) Employee agrees that the breach by Employee of any of the foregoing covenants is likely to result in irreparable harm, directly or indirectly, to Employer and Dycom. Employee, therefore, consents and agrees that if Employee violates any of such covenants, Employer and Dycom shall be entitled, among and in addition to any other rights or remedies available under this Employment Agreement or at law or in equity, to temporary and permanent injunctive relief to prevent Employee from committing or continuing a breach of such covenants. (e) It is the desire, intent and agreement of Employee, Employer and Dycom that the restrictions placed on Employee by this paragraph 4 be enforced to the fullest extent permissible under the law and public policy applied by any jurisdiction in which enforcement is sought. Accordingly, if and to the extent that any portion of this paragraph 4 shall be adjudicated to be unenforceable, such portion shall be deemed amended to delete therefrom or to reform the portion thus adjudicated to be invalid or unenforceable, such deletion or reformation to apply only with respect to the operation of such portion in the particular jurisdiction in which such adjudication is made. (f) Any controversy or claim arising out of or relating to this Employment Agreement shall be settled by arbitration in Philadelphia County, Pennsylvania, in accordance with the rules then in effect of the American Arbitration Association, and judgment upon the award rendered may be entered in any court having 4 jurisdiction thereon. The arbitrator(s) shall have the right and ability to award attorneys' fees to the prevailing party in any such arbitration proceeding. 5. Termination. (a) Employer shall have the right to terminate Employee's employment at any time for cause for any of the following reasons: (i) Employee is convicted by a court of competent and final jurisdiction of any crime, whether or not involving Employer, that constitutes a felony in the jurisdiction involved; (ii) Employee commits any act of fraud, misappropriation, embezzlement, unethical business conduct or other act of dishonesty against Employer, or shall materially breach a fiduciary obligation thereto; and/or (iii)Employee materially breaches this Employment Agreement or fails or refuses to perform any of his material duties as required by this Employment Agreement in any material respect. Notwithstanding the provisions of this paragraph 5(a) and/or termination thereunder, Employer and Dycom shall pay to Employee his total compensation for a minimum of the first three (3) years of this Agreement without limitation including all benefits and perquisites. (b) Unless otherwise terminated earlier pursuant to the terms of this Employment Agreement, Employee's employment under this Employment Agreement will terminate upon Employee's death and may be terminated by Employer or Employee upon giving not less than thirty (30) days written notice to the other in the event that Employee, because of physical or mental disability or incapacity, is unable to perform Employee's duties hereunder for an aggregate of 180 working days during any 12-month period. All questions arising under this Employment Agreement as regards Employee's disability or incapacity shall be determined by a reputable physician mutually selected by Employer and Employee at the time such question arises. If Employer and Employee cannot agree upon the selection of a physician within a period of seven days after such question arises, then the chief of staff of University of Pennsylvania Hospital, Philadelphia, Pennsylvania shall be asked to select a physician to make such determination. The determination of the physician selected pursuant to the above provisions of this paragraph 5(b) as to such matters shall be conclusively binding upon the parties hereto. Notwithstanding the provisions of this 5 paragraph 5(b) and/or termination thereunder, Employer and Dycom shall pay to Employee his total compensation for a minimum of the first three (3) years of this Agreement without limitation including all benefits and perquisites. (c) Employee may terminate this Employment Agreement if Employer materially breaches this Employment Agreement or any other agreement with Employee. For purposes of this paragraph 5, the Employer shall be deemed to have materially breached this Employment Agreement if (i) Employer fails to pay any portion of the compensation or provide Employee any employee benefit due Employee hereunder, (ii) Employer discharges Employee without cause, (iii) Employer materially breaches any other agreement with Employee, or (iv) Employer materially and inappropriately changes the duties and responsibilities of Employee. If Employee shall terminate this Employment Agreement as provided in this paragraph 5(c) then, provided that Employer does not also have grounds to terminate this Employment Agreement for cause as defined in paragraph 5(a) hereof, Employee shall not be liable to Employer for any damages as a result thereof and shall not be bound by the provisions of paragraph 4(c) hereof. (d) In the event Employer terminates Employee's employment without cause as defined in paragraph 5(a) hereof, Employee shall receive as damages for breach of this Employment Agreement an amount equal to the total compensation Employee would have received had employment continued for the first thirty-six (36) month term of this Employment Agreement. 6. Assignment and Succession. (a) The services to be rendered and obligations to be performed by Employee under this Employment Agreement are special and unique, and all such services and obligations and all of Employee's rights under this Employment Agreement are personal to the Employee and shall not be assignable or transferrable. In the event of Employee's death, however, Employee's personal representative shall be entitled to receive any and all payments then due under this Employment Agreement. Employer may assign this Employment Agreement to any subsidiary of the Employer or in connection with any merger or consolidation involving the Employer or a sale of substantially all of the assets of the Employer, as the case may be, provided that such successor shall assume (by contract or operation of law) all of Employer's obligations hereunder. In such event, Employee shall have the right to terminate this Employment Agreement and Employer and Dycom shall pay to Employee his total compensation for a minimum of three (3) years of this Agreement without limitation including all benefits and perquisites. 6 (b) This Employment Agreement shall inure to the benefit of and be binding upon and enforceable by the Employer, Dycom and the Employee and their respective successors, permitted assigns, heirs, legal representatives, executors, and administrators. If the Employer or Dycom shall be merged into or consolidated with another entity, the provisions of the Employment Agreement shall be binding upon and inure to the benefit of the entity surviving such merger or resulting from such consolidation. The Employer and Dycom will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Employer or Dycom, by agreement in form and substance satisfactory to the Employee, to expressly assume and agree to perform this Employment Agreement in the same manner that the Employer would be required to perform it if no such succession had taken place. The provisions of this paragraph 6(b) shall continue to apply to each subsequent employer of the Employee hereunder in the event of any subsequent merger, consolidation, or transfer of assets of such subsequent employer. 7. Notices. Any notice, request or other communication to be given by any party to this Employment Agreement shall be in writing and be sent by certified mail, postage prepaid, addressed to the parties as follows: If to Employer or Dycom: Mr. Thomas R. Pledger Dycom Industries, Inc. First Union Center 4440 PGA Boulevard, Suite 600 Palm Beach Gardens, Florida 33410 with copies to: L. Frank Chopin, Esq. Chopin, Miller & Yudenfreund 440 Royal Palm Way, Suite 200 Palm Beach, Florida 33480 If to Employee: Mr. George Tamasi Communications Construction Group, Inc. 234 East Gay Street P.O. Box 561 West Chester, PA 19380 with copies to: Joseph T. Kelley, Jr., Esq. Kelley and Murphy Union Meeting Corporate Center V 925 Harvest Drive, Suite 160 Blue Bell, PA 19422 or to such other address as the parties respectively may designate by notice given in like manner, and any such notice, request or other communication shall be deemed to have given when mailed as described above. 8. Waiver of Breach. The waiver by Employer, Dycom or Employee of a breach of any provision of this Employment Agreement by another party shall not operate or be construed as a waiver by any other party of any subsequent breach. 9. Amendment. This Employment Agreement may be amended only by written instrument signed by all parties hereto. 10. Governing Law. This Employment Agreement shall be governed by the laws of the Commonwealth of Pennsylvania without giving effect to choice of law principles. 11. Partial invalidity. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. 12. Entire Agreement All prior negotiations and agreements between the parties hereto with respect to the matters contained herein are superseded by this Employment Agreement, and there are no representations, warranties, understandings or agreements other than those expressly set forth herein. 8 IN WITNESS WHEREOF, the parties have entered into this Employment Agreement as of the date set forth above. COMMUNICATIONS CONSTRUCTION GROUP, INC. By: /s/ George Tamasi Title: DYCOM INDUSTRIES, INC. By: /s/ Thomas R. Pledger Thomas R. Pledger Chairman of the Board and Chief Executive Officer /s/ George Tamasi George Tamasi, Individually EX-99 6 EXHIBIT 99(V) EMPLOYMENT AGREEMENT This Employment Agreement is made this 29th day of July, 1997, between Thomas Polis ("Employee"), Communications Construction Group, Inc. ("Employer") and Dycom Industries, Inc. ("Dycom"). 1. Employment and Board of Directors. Subject to the terms and conditions hereof, Employer hereby agrees to continue to employ employee as Employer's Executive Vice President to perform such specific duties and have such responsibilities as Employer's Board of Directors may from time to time establish; provided, however, that such duties shall be consistent with the duties and responsibilities typically accorded to an executive vice president. Employee hereby accepts continued employment by Employer as Executive Vice President of Employer, subject to the terms and conditions hereof, and agrees to continue to devote his full time and attention to his duties hereunder, to the best of his abilities consistent with prior practice. The Board of Directors of Employer shall be four (4) in number, consisting of Employee, George Tamasi, Thomas R. Pledger and Steven E. Nielsen, who shall each have one (1) vote. 2. Term of Employment. Employee's employment pursuant to this Employment Agreement shall commence on the date hereof and shall terminate upon the earlier of (a) termination pursuant to paragraph 5 hereof or (b) five (5) years from the date hereof, unless terminated by mutual agreement of the parties hereto after the first three years (3) of employment. 3. Compensation, Benefits and Expenses. (a) At the commencement of this Employment Agreement, Employee shall be paid a base annual salary of $260,000. Payment will be made on the regularly scheduled pay dates of the Employer, subject to all appropriate withholdings or other deductions required by law or by Employer's established policies applicable to all employees of the Employer. Employer may increase Employee's salary at Employer's sole discretion, but shall not reduce such salary below the rate established by this Employment Agreement without Employee's written consent. 2 (b) During the term of employment, Employer shall provide Employee with all the benefits and perquisites, without limitation, that Employee received from Employer prior to its acquisition by Dycom. (c) In addition to any other compensation payable to Employee pursuant to this Employment Agreement, Employee during the term of this Employment Agreement may be paid an annual bonus as determined by and within the sole discretion of Dycom's Board of Directors. (d) Employee's services hereunder shall be performed at the principle offices of the Employer in West Chester, Pennsylvania and West Palm Beach, Florida, subject to such reasonable travel as the performance of Employee's duties and the business of Employer may require consistent with prior practice. (e) In addition to compensation payable to Employee as described above, Employee shall be entitled to participate in all employee benefit plans or programs of Employer as are available to management employees of Employer generally and such other benefit plans or programs as may be specified by the Employer's Board of Directors, including any stock options that may be granted by the Board of Directors of Dycom. Employer hereby waives Employee's waiting period for eligibility under its medical benefits plan. (f) On a timely basis, Employer shall reimburse Employee for such reasonable out-of-pocket expenses as Employee may incur for and on behalf of the furtherance of Employer's business, provided that Employee submits to Employer satisfactory documentation or other support for such expenses in accordance with Employer's expense reimbursement policy. 4. Covenants of Employee. (a) During the term of this Employment Agreement, Employee shall not directly or indirectly engage in any business, whether as a proprietor, partner, joint venturer, employer, agent, employee, consultant, officer or beneficial or record owner of more than one percent of the stock of any corporation or association of any nature which is competitive to the business conducted by Employer, Dycom, or any of Dycom's other wholly owned subsidiaries. (b) During the term of this Employment Agreement, Employee will not divulge or appropriate to Employee's own use or to the use of others any trade secrets or confidential information or confidential knowledge pertaining in any to the business of Employer, Dycom or any of Dycom's other wholly owned subsidiaries. (c) In the event Employee breaches this Employment Agreement or if Employee's employment is terminated pursuant to paragraph 5(a) of this Employment Agreement, and Employer and/or Dycom has not breached this Employment Agreement or any other 3 agreement with Employee, Employee separately agrees, being fully aware that the performance of this Employment Agreement is important to preserve the present value of the property and business of Employer and Dycom, that for the greater of (i) twelve (12) calendar months following the date of such termination or (ii) the unexpired portion of the first three (3) years of this Employment Agreement, Employee shall not directly or indirectly engage in any business, whether as proprietor, partner, joint venturer, employer, agent, employee, consultant, officer or beneficial or record owner of more than one percent of the stock of any corporation or association of any nature which is competitive to the business conducted by Employer or any of Dycom's other wholly owned subsidiaries in the current geographical service area of Employer or in any other geographical service area of Employer or any of Dycom's other wholly owned subsidiaries during the term of Employee's employment. Within such geographical service areas and during such non-compete period, Employee shall not solicit or do business competitive to the business conducted by Employer or any of Dycom's other wholly owned subsidiaries, with any customers, partners or associates of Employer or any of Dycom's other wholly owned subsidiaries. (d) Employee agrees that the breach by Employee of any of the foregoing covenants is likely to result in irreparable harm, directly or indirectly, to Employer and Dycom. Employee, therefore, consents and agrees that if Employee violates any of such covenants, Employer and Dycom shall be entitled, among and in addition to any other rights or remedies available under this Employment Agreement or at law or in equity, to temporary and permanent injunctive relief to prevent Employee from committing or continuing a breach of such covenants. (e) It is the desire, intent and agreement of Employee, Employer and Dycom that the restrictions placed on Employee by this paragraph 4 be enforced to the fullest extent permissible under the law and public policy applied by any jurisdiction in which enforcement is sought. Accordingly, if and to the extent that any portion of this paragraph 4 shall be adjudicated to be unenforceable, such portion shall be deemed amended to delete therefrom or to reform the portion thus adjudicated to be invalid or unenforceable, such deletion or reformation to apply only with respect to the operation of such portion in the particular jurisdiction in which such adjudication is made. (f) Any controversy or claim arising out of or relating to this Employment Agreement shall be settled by arbitration in Philadelphia County, Pennsylvania, in accordance with the rules then in effect of the American Arbitration Association, and judgment upon the award rendered may be entered in any court having 4 jurisdiction thereon. The arbitrator(s) shall have the right and ability to award attorneys' fees to the prevailing party in any such arbitration proceeding. 5. Termination. (a) Employer shall have the right to terminate Employee's employment at any time for cause for any of the following reasons: (i) Employee is convicted by a court of competent and final jurisdiction of any crime, whether or not involving Employer, that constitutes a felony in the jurisdiction involved; (ii) Employee commits any act of fraud, misappropriation, embezzlement, unethical business conduct or other act of dishonesty against Employer, or shall materially breach a fiduciary obligation thereto; and/or (iii) Employee materially breaches this Employment Agreement or fails or refuses to perform any of his material duties as required by this Employment Agreement in any material respect. Notwithstanding the provisions of this paragraph 5(a) and/or termination thereunder, Employer and Dycom shall pay to Employee his total compensation for a minimum of the first three (3) years of this Agreement without limitation including all benefits and perquisites. (b) Unless otherwise terminated earlier pursuant to the terms of this Employment Agreement, Employee's employment under this Employment Agreement will terminate upon Employee's death and may be terminated by Employer or Employee upon giving not less than thirty (30) days written notice to the other in the event that Employee, because of physical or mental disability or incapacity, is unable to perform Employee's duties hereunder for an aggregate of 180 working days during any 12-month period. All questions arising under this Employment Agreement as regards Employee's disability or incapacity shall be determined by a reputable physician mutually selected by Employer and Employee at the time such question arises. If Employer and Employee cannot agree upon the selection of a physician within a period of seven days after such question arises, then the chief of staff of University of Pennsylvania Hospital, Philadelphia, Pennsylvania shall be asked to select a physician to make such determination. The determination of the physician selected pursuant to the above provisions of this paragraph 5(b) as to such matters shall be conclusively binding upon the parties hereto. Notwithstanding the provisions of this 5 paragraph 5(b) and/or termination thereunder, Employer and Dycom shall pay to Employee his total compensation for a minimum of the first three (3) years of this Agreement without limitation including all benefits and perquisites. (c) Employee may terminate this Employment Agreement if Employer materially breaches this Employment Agreement or any other agreement with Employee. For purposes of this paragraph 5, the Employer shall be deemed to have materially breached this Employment Agreement if (i) Employer fails to pay any portion of the compensation or provide Employee any employee benefit due Employee hereunder, (ii) Employer discharges Employee without cause, (iii) Employer materially breaches any other agreement with Employee or (iv) Employer materially and inappropriately changes the duties and responsibilities of Employee. If Employee shall terminate this Employment Agreement as provided in this paragraph 5(c) then, provided that Employer does not also have grounds to terminate this Employment Agreement for cause as defined in paragraph 5(a) hereof, Employee shall not be liable to Employer for any damages as a result thereof and shall not be bound by the provisions of paragraph 4(c) hereof. (d) In the event Employer terminates Employee's employment without cause as defined in paragraph 5(a) hereof, Employee shall receive as damages for breach of this Employment Agreement an amount equal to the total compensation Employee would have received had employment continued for the first thirty-six (36) month term of this Employment Agreement. 6. Assignment and Succession. (a) The services to be rendered and obligations to be performed by Employee under this Employment Agreement are special and unique, and all such services and obligations and all of Employee's rights under this Employment Agreement are personal to the Employee and shall not be assignable or transferrable. In the event of Employee's death, however, Employee's personal representative shall be entitled to receive any and all payments then due under this Employment Agreement. Employer may assign this Employment Agreement to any subsidiary of the Employer or in connection with any merger or consolidation involving the Employer or a sale of substantially all of the assets of the Employer, as the case may be, provided that such successor shall assume (by contract or operation of law) all of Employer's obligations hereunder. In such event, Employee shall have the right to terminate this Employment Agreement and Employer and Dycom shall pay to Employee his total compensation for a minimum of the first three (3) years of this Agreement without limitation including all benefits and perquisites. 6 (b) This Employment Agreement shall inure to the benefit of and be binding upon and enforceable by the Employer, Dycom and the Employee and their respective successors, permitted assigns, heirs, legal representatives, executors, and administrators. If the Employer or Dycom shall be merged into or consolidated with another entity, the provisions of the Employment Agreement shall be binding upon and inure to the benefit of the entity surviving such merger or resulting from such consolidation. The Employer and Dycom will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Employer or Dycom, by agreement in form and substance satisfactory to the Employee, to expressly assume and agree to perform this Employment Agreement in the same manner that the Employer would be required to perform it if no such succession had taken place. The provisions of this paragraph 6(b) shall continue to apply to each subsequent employer of the Employee hereunder in the event of any subsequent merger, consolidation, or transfer of assets of such subsequent employer. 7. Notices. Any notice, request or other communication to be given by any party to this Employment Agreement shall be in writing and be sent by certified mail, postage prepaid, addressed to the parties as follows: If to Employer or Dycom: Mr. Thomas R. Pledger Dycom Industries, Inc. First Union Center 4440 PGA Boulevard, Suite 600 Palm Beach Gardens, Florida 33410 with copies to: L. Frank Chopin, Esq. Chopin, Miller & Yudenfreund 440 Royal Palm Way, Suite 200 Palm Beach, Florida 33480 7 If to Employee: Mr. Thomas Polis Communications Construction Group, Inc. 234 East Gay Street P.O. Box 561 West Chester, PA 19380 with copies to: Joseph T. Kelley, Jr., Esq. Kelley and Murphy Union Meeting Corporate Center V 925 Harvest Drive, Suite 160 Blue Bell, PA 19422 or to such other address as the parties respectively may designate by notice given in like manner, and any such notice, request or other communication shall be deemed to have given when mailed as described above. 8. Waiver of Breach. The waiver by Employer, Dycom or Employee of a breach of any provision of this Employment Agreement by another party shall not operate or be construed as a waiver by any other party of any subsequent breach. 9. Amendment. This Employment Agreement may be amended only by written instrument signed by all parties hereto. 10. Governing Law. This Employment Agreement shall be governed by the laws of the Commonwealth of Pennsylvania without giving effect to choice of law principles. 11. Partial invalidity. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. 12. Entire Agreement All prior negotiations and agreements between the parties hereto with respect to the matters contained herein are superseded by this Employment Agreement, and there are no representations, warranties, understandings or agreements other than those expressly set forth herein. 9 IN WITNESS WHEREOF, the parties have entered into this Employment Agreement as of the date set forth above. COMMUNICATIONS CONSTRUCTION GROUP, INC. By: /s/ Thomas Polis Title: DYCOM INDUSTRIES, INC. By: /s/ Thomas R. Pledger Thomas R. Pledger Chairman of the Board and Chief Executive Officer /s/ Thomas Polis Thomas Polis, Individually EX-99 7 EXHIBIT 99 (VI) 1 N E W S R E L E A S E FOR IMMEDIATE RELEASE CONTACT: Thomas R. Pledger Chairman and CEO Steven E. Nielsen President and COO (561) 627-7171 DYCOM COMPLETES MERGER WITH COMMUNICATIONS CONSTRUCTION GROUP INC. PALM BEACH GARDENS, FLORIDA, JULY 30, 1997 -- DYCOM INDUSTRIES, INC. (NYSE Symbol: "DY") announced today that it has consummated a merger whereby COMMUNICATIONS CONSTRUCTION GROUP INC. became a wholly-owned subsidiary. COMMUNICATIONS CONSTRUCTION GROUP INC. is a West Chester, Pennsylvania based firm, which provides construction and engineering services to the telecommunications industry throughout the United States. Its current management will continue to manage the operations of COMMUNICATIONS CONSTRUCTION GROUP INC. Dycom feels the addition of the services provided by COMMUNICATIONS CONSTRUCTION GROUP INC. will greatly enhance its broadband construction and engineering capabilities nationwide. DYCOM INDUSTRIES, INC. provides fiber optic transmission, comprehensive services installations, other telephone engineering, and electrical services to the telecommunications and electrical utilities industries nationwide through its wholly-owned subsidiaries. A conference call will be hosted at 11:00 a.m. ET, Thursday, July 31, Call 800 272-5652, PassCode 2530# -----END PRIVACY-ENHANCED MESSAGE-----