0000950144-01-507634.txt : 20011010
0000950144-01-507634.hdr.sgml : 20011010
ACCESSION NUMBER: 0000950144-01-507634
CONFORMED SUBMISSION TYPE: DEF 14A
PUBLIC DOCUMENT COUNT: 1
CONFORMED PERIOD OF REPORT: 20011120
FILED AS OF DATE: 20011009
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: 0729
FILING VALUES:
FORM TYPE: DEF 14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-10613
FILM NUMBER: 1754942
BUSINESS ADDRESS:
STREET 1: 4440 PGA BLVD. STE 500
STREET 2: FIRST UNION CENTER
CITY: PALM BEACH GARDENS
STATE: FL
ZIP: 33410
BUSINESS PHONE: 5616277171
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
DEF 14A
1
g71449dedef14a.txt
DYCOM INDUSTRIES, INC. FORM DEF 14A 11/20/01
1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
DYCOM INDUSTRIES, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
2
(DYCOM INDUSTRIES, INC. LOGO)
DYCOM INDUSTRIES, INC.
FIRST UNION CENTER, SUITE 500
4440 PGA BOULEVARD
PALM BEACH GARDENS, FLORIDA 33410
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 20, 2001
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders (the "Annual Meeting") of Dycom
Industries, Inc. (the "Company") will be held at 11:00 a.m. (EST), on Tuesday,
November 20, 2001, at the DoubleTree Hotel, 4431 PGA Boulevard, Palm Beach
Gardens, Florida. The Annual Meeting will be held for the following purposes:
1. To elect four Directors;
2. To vote upon a proposal to approve the Company's 2001 Directors
Stock Option Plan; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournments of the Annual Meeting.
The Board of Directors has fixed the close of business on Tuesday, October
9, 2001, as the record date for the determination of the shareholders entitled
to notice of and to vote at the Annual Meeting.
IMPORTANT
Please mark, date, sign and return the enclosed proxy card promptly so that
your shares can be voted. If you attend the Annual Meeting you may withdraw your
completed proxy and vote in person.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Marc R. Tiller
--------------------------------------
Marc R. Tiller
Secretary
October 16, 2001
3
DYCOM INDUSTRIES, INC.
FIRST UNION CENTER, SUITE 500
4440 PGA BOULEVARD
PALM BEACH GARDENS, FLORIDA 33410
------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, NOVEMBER 20, 2001
------------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Dycom Industries, Inc. (the "Company") for
use at the Annual Meeting of Shareholders to be held on Tuesday, November 20,
2001, at the DoubleTree Hotel, 4431 PGA Boulevard, Palm Beach Gardens, Florida,
at 11:00 a.m. (EST), or at any adjournments thereof (the "Annual Meeting"), for
the purposes set forth in the accompanying notice of Annual Meeting of
Shareholders.
Only shareholders of record at the close of business on October 9, 2001
(the "Record Date") will be entitled to notice of and to vote at the Annual
Meeting. On October 1, 2001, the Company had 42,925,293 shares of common stock,
par value $0.33 1/3, issued and outstanding. Each share of common stock entitles
the holder thereof to one vote.
A proxy card that is properly marked, signed, dated and returned in time
for the Annual Meeting will be voted in accordance with the instructions
contained therein. If no instructions are indicated, each share of common stock
represented by proxy will be voted for the election of the listed nominee
directors and the approval of the Company's 2001 Directors Stock Option Plan.
This Proxy Statement and the accompanying proxy card are being mailed to
shareholders on or about October 16, 2001. Any shareholder giving a proxy has
the power to revoke the proxy prior to its use. The proxy can be revoked by
filing an instrument of revocation with the Secretary of the Company or by
submitting a proxy bearing a later date than the proxy being revoked prior to
the Annual Meeting. Additionally, shareholders who attend the Annual Meeting may
revoke a previously granted proxy and vote in person.
The presence in person or by proxy of the holders of a majority of the
common stock will constitute a quorum. A quorum is necessary to transact
business at the Annual Meeting. With the exception of the election of directors
which requires a plurality of the votes cast, the affirmative vote of a majority
of the shares of common stock represented at the Annual Meeting is required to
approve any other proposals. Shares of common stock represented by proxies that
reflect abstentions or "broker non-votes" (i.e., shares held by a broker or
nominee which are represented at the Annual Meeting, but with respect to which
such broker or nominee is not empowered to vote on a particular proposal) will
be counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum.
A copy of the Company's Annual Report to Shareholders, including financial
statements for the fiscal years ended July 28, 2001 and July 29, 2000, is
enclosed with this Proxy Statement, but such documentation does not constitute a
part of the proxy soliciting material.
4
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Articles of Incorporation provides that the Board of
Directors shall be divided into three classes, with each class having a three
year term and a number of Directors as equal as possible. Four director nominees
have been nominated for election at the Annual Meeting. The nominees are Thomas
G. Baxter, Joseph M. Schell, Tony G. Werner and Kristina M. Johnson. Each
nominee was selected by the Corporate Governance Committee and approved by the
Board of Directors at its August 27, 2001 meeting for submission to the
Company's shareholders. Thomas G. Baxter, Joseph M. Schell and Tony G. Werner
are currently serving terms which expire at the Annual Meeting. Thomas G. Baxter
and Joseph M. Schell have been nominated for a term expiring at the year 2004
Annual Meeting of the Shareholders. Tony G. Werner and Kristina M. Johnson have
been nominated for a term expiring at the year 2002 Annual Meeting of the
Shareholders. If any herein director nominees become unable to accept nomination
or election, which is not anticipated, the persons acting under such proxies
will vote for the election of such other person as the Board of Directors may
recommend.
TERM
PRINCIPAL OCCUPATION EXPIRES
FOR PAST FIVE YEARS AT ANNUAL
AND DIRECTORSHIPS IN DIRECTOR MEETING
NOMINEES FOR ELECTION AGE PUBLIC COMPANIES SINCE FOR
--------------------- --- -------------------- -------- ---------
Thomas G. Baxter.................. 54 President and Chief Executive Officer of 1999 2004
Audible, Inc., a provider of spoken audio
via the Internet, from February 2000 to
August 2001
Operating Partner of Evercore Partners, an
investment company, from May 1998 to May
2000
President of Comcast Cable Communications,
Inc. from November 1989 to March 1998
Director, Audible, Inc. and Worldgate
Communications
Joseph M. Schell.................. 55 Chairman of Global Technology Investment 1999 2004
Banking at Merrill Lynch since February
2000
Consultant to Banc of America Securities
LLC (formerly Nationsbanc Montgomery
Securities LLC) from March 1999 to January
2000
Senior Managing Director and Director of
Investment Banking of Nationsbanc
Montgomery Securities LLC from May 1985 to
March 1999
Director, Sanmina Corporation
Tony G. Werner.................... 45 Executive Vice President Strategic 2000(1) 2002
Technologies, Qwest Services Corporation
since June 2001
President and Chief Executive Officer of
Aurora Networks from September 2000 to
June 2001
Chief Technology Officer of AT&T Broadband
from July 1994 to September 2000
2
5
TERM
PRINCIPAL OCCUPATION EXPIRES
FOR PAST FIVE YEARS AT ANNUAL
AND DIRECTORSHIPS IN DIRECTOR MEETING
NOMINEES FOR ELECTION AGE PUBLIC COMPANIES SINCE FOR
--------------------- --- -------------------- -------- ---------
Kristina M. Johnson............... 44 Dean, School of Engineering and Professor, N/A 2002
Department of Electrical and Computer
Engineering, Duke University since July
1999
Professor, Electrical and Computer
Engineering Department, University of
Colorado, Boulder from May 1994 to June
1999
Director, Mineral Technologies since May
2000
---------------
(1) Tony G. Werner was elected by the Board of Directors on December 19, 2000 to
fill a vacancy until this Annual Meeting or until his successor shall have
been duly elected and shall have qualified.
TERM
PRINCIPAL OCCUPATION EXPIRES
FOR PAST FIVE YEARS AT ANNUAL
DIRECTORS WHOSE TERMS AND DIRECTORSHIPS IN DIRECTOR MEETING
CONTINUE BEYOND THE MEETING AGE PUBLIC COMPANIES SINCE FOR
--------------------------- --- -------------------- -------- ---------
Steven E. Nielsen................. 38 President and Chief Executive Officer of 1996 2003
the Company since March 10, 1999;
President and Chief Operating Officer from
August 26, 1996 to March 10, 1999; and
Vice President from February 26, 1996 to
August 26, 1996
Ronald P. Younkin................. 59 President and Chief Executive Officer of 1975 2003
Greenlawn Mobile Home Sales, Inc. since
1981
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that shareholders vote "FOR" the election
of Thomas G. Baxter, Joseph M. Schell, Tony G. Werner and Kristina M. Johnson as
directors.
BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held 12 meetings in the fiscal year ended July 28,
2001. Each incumbent director attended more than 75% of the aggregate of the
meetings held by the Board of Directors and its respective committees on which
he served.
The Board of Directors has established five committees; an Audit Committee,
a Compensation Committee, a Corporate Governance Committee, an Executive
Committee and a Finance Committee.
AUDIT COMMITTEE. The Audit Committee currently consists of Thomas G.
Baxter, Joseph M. Schell and Ronald P. Younkin. The principal functions of the
Audit Committee are to recommend to the Board of Directors the engagement of the
Company's independent auditors; to determine the scope of services provided by
the independent auditors; to review the methodologies used by the Company in its
accounting and financial reporting practices; to review the results of the
annual audit and the Company's annual financial statements; and to oversee the
Company's internal control and internal auditing activities. The Audit Committee
met four times during fiscal 2001.
3
6
COMPENSATION COMMITTEE. The Compensation Committee currently consists of
Thomas G. Baxter and Ronald P. Younkin. The principal functions of the
Compensation Committee are to recommend to the Board of Directors the
compensation of the Company's officers and employees; and to administer the
Company's stock option plans. The Compensation Committee met five times during
fiscal 2001.
CORPORATE GOVERNANCE COMMITTEE. The Corporate Governance Committee
currently consists of Joseph M. Schell and Tony G. Werner. The principal
functions of the Corporate Governance Committee are to recommend to the Board of
Directors the director nominees for election by the Company's shareholders,
including those nominees that are recommended by shareholders in accordance with
the procedures set forth in the Company's By-Laws; to recommend to the Board of
Directors persons to fill vacancies on the Board; to recommend to the Board of
Directors the appointment of officers of the Company; to recommend to the Board
of Directors the appointment of its members to serve on the five committees of
the Board; to periodically review the number and functions of the committees of
the Board; to evaluate individual directors in depth on an annual basis; to
evaluate the performance of the Chief Executive Officer on an annual basis and
submit its evaluation to the Compensation Committee; to review the independence
of outside directors on an annual basis; to review management succession and
development plans on a regular basis; to recommend the process and oversee the
assessment of the Board's evaluation of the Board's performance; and to counsel
the Board on other corporate governance matters. The Corporate Governance
Committee met four times during fiscal 2001.
EXECUTIVE COMMITTEE. The Executive Committee currently consists of Steven
Nielsen, Thomas G. Baxter and Ronald P. Younkin. The Executive Committee is
empowered to act for the full Board of Directors during intervals between Board
meetings, with the exception of certain matters that by law may not be
delegated. The Executive Committee did not meet during fiscal 2001.
FINANCE COMMITTEE. The Finance Committee currently consists of Joseph M.
Schell and Tony G. Werner. The principal functions of the Finance Committee are
to set policy for short-term investments; to review borrowing arrangements; and
to recommend changes in the capital structure and operating budget of the
Company. The Finance Committee did not meet during fiscal 2001.
DIRECTOR COMPENSATION
Directors who are employees of the Company do not receive fees for service
on the Board of Directors or any Board committee. All other directors receive an
$18,000 annual fee for service; $1,500 for each regular or special meeting of
the Board of Directors attended at the corporate office; $750 for each committee
meeting attended in conjunction with a meeting of the Board of Directors; $750
for each telephonic meeting of the Board of Directors or a Board committee;
$1,500 for special committee meetings held at the corporate office, and
reimbursement of reasonable expenses incurred in connection with all such
meetings. In addition, upon the initial election of directors who are not
employees of the Company, each such director receives a non-qualified option to
purchase 12,000 shares of common stock at an exercise price equal to the fair
market value of the common stock on the date the option is granted. Each option
is exercisable at a rate of 4,000 shares per year beginning on the first
anniversary of the option's grant date.
4
7
AUDIT COMMITTEE REPORT
The Audit Committee (the "Committee") operates in accordance with its
written charter adopted by the Board of Directors. A copy of the Committee's
charter is attached to this Proxy Statement as Exhibit A.
On behalf of the Board of Directors, the Committee oversees the quality and
integrity of the accounting, auditing and financial reporting practices of the
Company. In fulfilling its oversight responsibilities, the Committee reviewed
and discussed the Company's consolidated financial statements for the fiscal
year ended July 28, 2001 with management and the independent auditors.
Management has the primary responsibility for preparing the Company's
consolidated financial statements and the independent auditors have the
responsibility for examining the statements. During fiscal year 2001, the
Committee also discussed the interim financial information contained in each
quarterly earnings announcement with management and the independent auditors
prior to public release.
The Committee discussed with management, the internal auditors and the
independent auditors the quality and adequacy of the Company's internal controls
and the internal audit function's organization, responsibilities, budget and
staffing. The Committee reviewed with both the independent and internal auditors
their audit plans, audit scope, and the identification of audit risks. As part
of the Committee's oversight responsibilities of the audit process, the
Committee obtained a written statement from the Company's independent auditors
as required by Independence Standards Board Standard No. 1 (Independence
discussions with Audit Committees), and discussed with the independent auditors
any relationships that may impact their objectivity and independence. The
Committee also discussed with the independent auditors all matters required by
Statement on Auditing Standards No. 61 (Communication with Audit Committees).
Based on the aforementioned reviews and discussions, the Committee
recommended that the Board of Directors include the audited consolidated
financial statements in the Company's Annual Report on Form 10-K for the year
ended July 28, 2001 for filing with the Securities and Exchange Commission. The
Committee also recommended to the Board of Directors the appointment of the
independent auditors.
The Committee has determined that the provision of the non-audit services
described in "Financial Information Systems Design and Implementation Fees" and
"All Other Fees" below is compatible with maintaining Deloitte & Touche LLP's
independence.
Ronald P. Younkin, Chair
Thomas G. Baxter
Joseph M. Schell
PRINCIPAL ACCOUNTING FIRM FEES
AUDIT FEES. The aggregate fees billed by Deloitte & Touche LLP
("Deloitte") and their affiliates for professional services rendered for the
audit of the Company's annual financial statements for the fiscal year ended
July 28, 2001 and for the reviews of the financial statements included in the
Company's quarterly reports on Form 10-Q for that fiscal year were $501,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. The
aggregate fees billed by Deloitte for professional services rendered for
information technology services relating to financial information systems design
and implementation for the fiscal year ended July 28, 2001 were $0.
ALL OTHER FEES. The aggregate fees billed by Deloitte for services
rendered to the Company, other than the services described above, were $339,000.
5
8
PROPOSAL 2
APPROVAL OF THE DYCOM INDUSTRIES, INC.
2001 DIRECTORS STOCK OPTION PLAN
At its August 27, 2001 meeting, the Board of Directors adopted the 2001
Directors Stock Option Plan (the "2001 Directors Plan"), subject to the approval
thereof by the shareholders of the Company at the Annual Meeting. A copy of the
2001 Directors Plan is attached to this proxy statement as Exhibit B, and the
description of the 2001 Directors Plan herein is qualified by reference to the
text of the attached 2001 Directors Plan.
DESCRIPTION OF THE PLAN
PURPOSES. The purposes of the 2001 Directors Plan are to attract, motivate
and retain qualified non-employee directors and to encourage their ownership of
Dycom Industries, Inc. Common Stock ("Common Stock"). The 2001 Directors Plan
authorizes the issuance of options to purchase shares of Common Stock to such
individuals ("Options").
ELIGIBLE INDIVIDUALS. Non-employee directors are eligible to be granted an
Option pursuant to the 2001 Directors Plan.
SHARES AVAILABLE UNDER THE 2001 DIRECTORS PLAN. 240,000 shares of Common
Stock will be authorized for issuance under the 2001 Directors Plan (the "Share
Limit"). Shares issued pursuant to the 2001 Directors Plan may be authorized but
unissued shares of Common Stock or reacquired shares of Common Stock held in the
treasury of the Company, or any combination thereof.
ADMINISTRATION. The 2001 Directors Plan will be administered by the Board
or any executive officer or officers of the Company designated by the Board (the
"Administrator"). The Administrator will have full and final authority to: (i)
establish such rules and procedures as may be necessary or advisable to
administer the 2001 Directors Plan; (ii) make factual interpretations in
connection with the administration or interpretation of the 2001 Directors Plan;
and (iii) adjust the number of shares of Common Stock subject to a future award
of Options from time to time and at any time. The Administrator may not make any
interpretation which changes or affects the selection of persons eligible under
the 2001 Directors Plan, the number of shares covered by any grant of Options
under the 2001 Directors Plan, or the terms and conditions thereof. Subject to
certain limitations, the Administrator may from time-to-time delegate some or
all of its authority to one or more employees of the Company.
AWARD DOCUMENT. Each Option will be evidenced by an award document issued
by the Company. In addition to the terms and conditions defined in the 2001
Directors Plan, such documents may contain such other terms and conditions, not
inconsistent with the 2001 Directors Plan as the Board shall prescribe. Such
additional terms may vary among award documents.
TERMS AND CONDITIONS OF OPTIONS. Under the terms of the 2001 Directors
Plan, the per share exercise price of an Option will be equal to 100% of the
fair market value of the Common Stock on the date of grant. Non-employee
directors will be eligible to receive the following awards: (i) each newly
elected or appointed non-employee director will be granted an Option to purchase
6,000 shares of Common Stock as of the date of such election or appointment and
(ii) at each Annual Meeting each non-employee director who will remain on the
Board following such Annual Meeting (except any such director who is newly
elected or appointed and receives a grant described in the preceding clause (i))
will be granted an Option to purchase 2,000 shares of Common Stock (or a
pro-rated fraction of 2,000 shares if the non-employee director has not served
for the entire period since the immediately preceding Annual Meeting); provided,
however, that at each Annual
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Meeting at which a non-employee director is reelected to the Board for at least
a three-year term (excluding a reelection that is within 12 months following a
grant described in the preceding clause (i)), he or she will receive an Option
to purchase 6,000 shares of Common Stock. The term of an Option will be ten
years unless terminated earlier under the terms of the 2001 Directors Plan or an
award document. Each Option granted to a non-employee director will vest in
equal installments on each of the first four anniversaries of the date of grant,
subject to earlier termination in certain circumstances outlined in the 2001
Directors Plan. At the discretion of the Board, the exercise price of an Option
may be paid in cash or through a "cashless exercise" procedure.
AMENDMENT OF THE 2001 DIRECTORS PLAN. The Board or the Administrator may
amend, modify, suspend, or terminate the 2001 Directors Plan at any time, except
that no such action will be taken without shareholder approval if in the
circumstances shareholder approval is required by law or under the rules of the
New York Stock Exchange or the stock exchange on which the shares are listed. No
amendment or termination may adversely affect an optionee's rights with respect
to previously granted Options without his or her consent.
ADJUSTMENTS. In the event of any change in the outstanding Common Stock by
reason of a stock dividend, recapitalization, reorganization, merger,
consolidation, stock split, combination or exchange of shares, or any other
significant corporate event affecting the Common Stock, the Board, in its
discretion, may make (i) such proportionate adjustments as it considers
appropriate (in the form determined by the Board in its sole discretion) to
prevent diminution or enlargement of the rights of optionees under the 2001
Directors Plan with respect to the aggregate number of shares of Common Stock
for which Options in respect thereof may be granted under the 2001 Directors
Plan, the number of shares of Common Stock covered by each outstanding Option
and the exercise prices in respect thereof and/or (ii) such other adjustments as
it deems appropriate.
TERMINATION OF THE 2001 DIRECTORS PLAN. Unless terminated earlier by the
Board, the 2001 Directors Plan will remain in effect until November 20, 2011. No
awards may be granted under the 2001 Directors Plan after November 20, 2011.
TAX CONSIDERATIONS. The grant of an Option will not result in the
recognition of taxable income by a non-employee director or in a deduction to
the Company. Upon exercise of an Option, a non-employee director will recognize
ordinary income in an amount equal to the excess of the fair market value of the
Common Stock purchased over the exercise price of the Option and a tax deduction
is allowable to the Company equal to the amount of such income. Gain or loss
upon a subsequent sale of any Common Stock received upon the exercise of an
Option generally would be taxed as capital gain or loss (long-term or short-
term, depending upon the holding period of the Common Stock sold). Certain
additional rules apply if the exercise price for an Option is paid in shares of
Common Stock previously owned by the non-employee director.
NEW PLAN BENEFITS. Options to be granted under the 2001 Directors Plan
will be made based upon the occurrence of future events and the number of
Options granted will depend on factors that are not currently known. It is not
presently possible to determine the benefits or amounts that will be received by
the non-employee director group in the future.
RECOMMENDATION
THE BOARD HAS UNANIMOUSLY APPROVED THE 2001 DIRECTORS PLAN AND THE
RESERVATION OF 240,000 SHARES OF COMMON STOCK FOR ISSUANCE UNDER THE 2001
DIRECTORS PLAN AND RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE 2001 DIRECTORS
PLAN AND THE RESERVATION OF SHARES FOR ISSUANCE THEREUNDER.
7
10
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
As of August 31, 2001, the following table sets forth certain information
regarding the beneficial ownership of common stock by each person known to the
Company to be the beneficial owner (as determined under the rules of the
Securities and Exchange Commission (the "SEC")) of more than five percent (5%)
of such shares, each director, each Named Executive Officer, and by all such
directors and executive officers of the Company.
SHARES BENEFICIALLY OWNED(1)
-------------------------------
OFFICERS, DIRECTORS AND STOCKHOLDERS: NUMBER PERCENT
------------------------------------- ------------- --------------
Perkins, Wolf, McDonnell & Company.......................... 4,896,650 11.39%
53 W. Jackson Boulevard, Suite 722
Chicago, Illinois 60604
Pilgrim Baxter & Associates, Ltd............................ 2,802,450 6.52%
825 Duportail Road
Wayne, Pennsylvania 19087
Delaware Management Holdings................................ 2,482,860 5.78%
2005 Market Street
Philadelphia, Pennsylvania 19103
Thomas G. Baxter............................................ 12,000 *
Kristina M. Johnson......................................... -- --
Steven E. Nielsen........................................... 291,918 *
Joseph M. Schell............................................ 42,000 *
Tony G. Werner.............................................. -- --
Ronald P. Younkin........................................... 208,957(2) *
Robert J. Delark............................................ 11,375 *
Richard L. Dunn............................................. 11,375 *
Dennis P. O'Brien........................................... -- --
Marc R. Tiller.............................................. 3,250 *
All directors and executive officers as a group of 10
persons, including the above.............................. 580,875 1.34%
---------------
* Less than 1%.
(1) Shares of common stock subject to options currently exercisable or
exercisable within 60 days are deemed outstanding for computing the
percentage ownership of the person holding the options but are not deemed
outstanding for computing the percentage ownership of any other person. Such
shares are included for Messrs. Baxter -- 7,000, Nielsen -- 175,625,
Schell -- 12,000, Delark -- 11,375, Dunn -- 11,375, Tiller -- 2,125 and all
directors and executive officers as a group -- 219,500, all of which options
are exercisable within 60 days of August 31, 2001.
(2) Excludes 27,852 shares owned by Ronald P. Younkin's wife and children, as to
which Mr. Younkin disclaims beneficial ownership. Excludes 1,136,674 shares
beneficially owned by Mary Irene Younkin as to which Mr. Younkin disclaims
beneficial ownership. Mr. Younkin is the son of Mary Irene Younkin.
8
11
MANAGEMENT COMPENSATION OF EXECUTIVE OFFICERS
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by the Company for services rendered during each of
the last three fiscal years by the Company's Chief Executive Officer and four
executive officers whose compensation exceeded $100,000 (the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
AWARDS
------------
OTHER STOCK
FISCAL ANNUAL OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION # OF SHARES COMPENSATION(2)
--------------------------- ------ -------- -------- ------------ ------------ ---------------
Steven E. Nielsen............................... 2001 $500,000 $500,000 $7,200 75,000 $4,910
President and Chief Executive Officer 2000 $416,000 $416,000 $7,338 45,000 $4,656
1999 $337,431 $337,431 $7,200 281,250 $6,714
Richard L. Dunn................................. 2001 $220,272 $ 80,000 -0- 8,000 $2,127
Senior Vice President and Chief Financial 2000 $108,327 $ 45,000 -0- 37,500 $ 783
Officer
Robert J. Delark................................ 2001 $220,272 $ 50,000 $7,200 8,000 $2,127
Senior Vice President and Chief Administrative 2000 $109,154 $ 45,000 $3,655 37,500 $ 783
Officer
Marc R. Tiller.................................. 2001 $115,394 $ 45,000 -0- 4,000 $2,044
General Counsel and Corporate Secretary 2000 91,827 $ 35,000 -0- 2,250 1,574
Dennis P. O'Brien(3)............................ 2001 $ 98,077 $ 25,000 -0- 8,000 $ 626
Vice President Corporate Development
---------------
(1) Bonus is earned in fiscal year 2001, but not distributed until October 2001.
(2) All other compensation for fiscal year 2001 consists of: (i) Company
contributions to the Dycom retirement savings plan (Mr. Nielsen $3,289; Mr.
Dunn $814; Mr. Delark $814; and Mr. Tiller $1,276); and (ii) Company paid
premiums for group term life insurance and long-term disability (Mr. Nielsen
$1,621; Mr. Dunn $1,313; Mr. Delark $1,313; Mr. O'Brien $626; and Mr. Tiller
$768).
(3) Effective as of November 27, 2000, Mr. O'Brien was appointed the Company's
Vice President Corporate Development. See "O'Brien Employment Agreement" on
page 13.
9
12
OPTION GRANTS IN FISCAL YEAR ENDED JULY 28, 2001
The following table sets forth additional information concerning the
options granted to the Named Executive Officers of the Company during fiscal
year 2001 under the Company's 1998 Incentive Stock Option Plan.
INDIVIDUAL GRANTS
---------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
% OF ASSUMED ANNUAL RATES OF STOCK
TOTAL PRICE APPRECIATION FOR
OPTIONS OPTIONS EXERCISE OPTION TERM
GRANTED GRANTED TO PRICE(1) EXPIRATION ------------------------------
NAME (# OF SHARES) EMPLOYEES ($/SHARE) DATE 5% 10%
---- ------------- ---------- ---------- ---------- ------------- -------------
Steven E. Nielsen.................. 75,000(2) 12.2% $45.3125 8/28/2010 $2,137,259 $5,416,234
President and Chief Executive
Officer
Richard L. Dunn.................... 8,000(2) 1.3% $45.3125 8/28/2010 $ 227,974 $ 577,732
Senior Vice President and Chief
Financial Officer
Robert J. Delark................... 8,000(2) 1.3% $45.3125 8/28/2010 $ 227,974 $ 577,732
Senior Vice President and Chief
Administrative Officer
Marc R. Tiller..................... 4,000(2) 0.6% $45.3125 8/28/2010 $ 113,987 $ 288,866
General Counsel and Corporate
Secretary
Dennis P. O'Brien.................. 8,000(2) 1.3% $44.2500 11/27/2010 $ 222,629 $ 564,185
Vice President Corporate
Development
---------------
(1) The exercise price is the closing price of Company's Common Stock as
reported on the NYSE Composite Transactions Tape on the date of grant.
(2) Options under the 1998 Plan vest in 25 percent increments each year
beginning on the first anniversary of the date of grant and have a term of
ten years. Stock options reported here were granted on August 28, 2000 and
November 27, 2000 (Mr. O'Brien -- 8,000). Messrs. Nielsen's, Delark's,
Dunn's, and O'Brien's options will be fully vested and immediately
exercisable upon a "change in control" of the Company.
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13
AGGREGATE STOCK OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END VALUE TABLE
The following table sets forth additional information with respect to the
Named Executive Officers of the Company concerning the exercise of options
during fiscal year 2001 and unexercised options held as of the fiscal year ended
July 28, 2001.
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-THE-
UNDERLYING UNEXERCISED MONEY OPTIONS AT JULY 28,
SHARES ACQUIRED OPTIONS AT JULY 28, 2001 2001($)(1)
ON EXERCISE VALUE ---------------------------- ----------------------------
NAME (# OF SHARES) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------------ ---------- ----------- ------------- ----------- -------------
Steven E. Nielsen............. 86,612 $3,837,503 111,563 305,625 $115,754 $1,033,563
President and Chief Executive
Officer
Richard L. Dunn............... -0- -0- 9,375 36,125 -0- -0-
Senior Vice President and
Chief Financial Officer
Robert J. Delark.............. -0- -0- 9,375 36,125 -0- -0-
Senior Vice President and
Chief Administrative Officer
Marc R. Tiller................ 1,125 19,990 -0- 6,813 -0- -0-
General Counsel and Corporate
Secretary
Dennis P. O'Brien............. -0- -0- -0- 8,000 -0- -0-
Vice President Corporate
Development
---------------
(1) The closing market value of the Company's common stock on July 27, 2001, as
reported on the NYSE Composite Transactions Tape, was $22.37.
11
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EMPLOYMENT AGREEMENTS
NIELSEN EMPLOYMENT AGREEMENT
Effective as of March 10, 1999, the Company entered into an amended and
restated employment agreement with Steven E. Nielsen (the "Nielsen Employment
Agreement"). Pursuant to the Nielsen Employment Agreement, Mr. Nielsen serves as
President and Chief Executive Officer of the Company. The employment agreement
between Mr. Nielsen and the Company provides for a term of employment that began
on March 10, 1999 and continues until March 9, 2004. Under the terms of the
employment agreement, Mr. Nielsen is provided with the following: (i) a minimum
annual base salary of $364,000; (ii) an annual bonus as determined within the
sole discretion of the Board of Directors; and (iii) eligibility to participate
in all employee benefit plans or programs of the Company, including, without
limitation, the Company's 1998 Incentive Stock Option Plan. Upon the Company's
termination of Mr. Nielsen's employment without "cause" or upon Mr. Nielsen's
resignation for "good reason," Mr. Nielsen will be entitled to a cash severance
payment equal to three times the sum of his annual base salary then in effect,
plus the highest bonus paid to him during the three fiscal years preceding such
termination or resignation. This cash severance payment will be payable as soon
as is administratively practical in substantially equal installments over the
12-month period following termination or resignation. In addition, Mr. Nielsen
and his dependents will continue to participate in the Company's health and
welfare plans during the 12-month period following his termination. If Mr.
Nielsen resigns or terminates employment for cause, he will not be entitled to
any severance pay. Mr. Nielsen has the right to resign for six months following
a "change in control," which will entitle him to the aforementioned cash
severance payment upon such resignation of employment. This cash severance
payment, triggered upon a change in control, will be payable in a lump sum
within five (5) days of the change in control. If the severance payment would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended, the Company will pay Mr. Nielsen a gross-up payment such
that the net amount of the severance payment retained by Mr. Nielsen after the
deduction of any excise tax will be equal to the amount of such payment prior to
the imposition of such excise tax. Mr. Nielsen is subject to noncompete and
nondisclosure of proprietary information covenants, however, in the event of a
change in control, the noncompete covenant will not be applicable.
DELARK EMPLOYMENT AGREEMENT
Effective as of January 21, 2000, the Company entered into an employment
agreement with Robert J. Delark (the "Delark Employment Agreement"). Pursuant to
the Delark Employment Agreement, Mr. Delark serves as Senior Vice President and
Chief Administrative Officer of the Company. The employment agreement between
Mr. Delark and the Company provides for a term of employment that began on
January 27, 2000 and continues until January 27, 2003. Under the terms of the
employment agreement, Mr. Delark is provided with the following: (i) a minimum
annual base salary of $215,000; (ii) an annual bonus equal to an amount between
20% and 50% of his base salary, if certain performance measures are met, as
determined within the sole discretion of the Board of Directors; and (iii)
eligibility to participate in all employee benefit plans or programs of the
Company, including, without limitation, the Company's 1998 Incentive Stock
Option Plan. Upon the Company's termination of Mr. Delark's employment without
"cause" or upon Mr. Delark's resignation as a result of a substantial and
material breach of any of the terms of the Delark Employment Agreement, Mr.
Delark will be entitled to the payment of his annual salary then in effect for
the greater of (i) the remainder of the term of employment or (ii) twelve (12)
months. This severance payment will be payable at such intervals as the same
would have been paid had Mr. Delark remained in the active service of the
Company. In addition, the Company will provide Mr. Delark and his eligible
dependents with group medical and life insurance benefits during the period he
is receiving severance payments (provided
12
15
that such benefits will cease earlier if he becomes eligible for similar
coverage with a new employer). If Mr. Delark resigns or the Company terminates
his employment for "cause," he will not be entitled to any severance pay.
Furthermore, Mr. Delark is subject to noncompete and nondisclosure of
proprietary information covenants.
DUNN EMPLOYMENT AGREEMENT
Effective as of January 28, 2000, the Company entered into an employment
agreement with Richard L. Dunn (the "Dunn Employment Agreement"). Pursuant to
the Dunn Employment Agreement, Mr. Dunn serves as Senior Vice President and
Chief Financial Officer of the Company. The employment agreement between Mr.
Dunn and the Company provides for a term of employment that began on January 28,
2000 and continues until January 28, 2003. Under the terms of the employment
agreement, Mr. Dunn is provided with the following: (i) a minimum annual base
salary of $215,000; (ii) an annual bonus equal to an amount between 20% and 50%
of his base salary, if certain performance measures are met, as determined
within the sole discretion of the Board of Directors; and (iii) eligibility to
participate in all employee benefit plans or programs of the Company, including,
without limitation, the Company's 1998 Incentive Stock Option Plan. Upon the
Company's termination of Mr. Dunn's employment without "cause," Mr. Dunn will be
entitled to the payment of his annual base salary then in effect for a period of
twelve (12) months. This severance payment will be payable at such intervals as
the same would have been paid had Mr. Dunn remained in the active service of the
Company. In addition, the Company will provide Mr. Dunn and his eligible
dependents with group medical and life insurance benefits during the period he
is receiving severance payments (provided that such benefits will cease earlier
if he becomes eligible for similar coverage with a new employer). If Mr. Dunn
resigns or the Company terminates his employment for "cause," he will not be
entitled to severance pay. Furthermore, Mr. Dunn is subject to noncompete and
nondisclosure of proprietary information covenants.
O'BRIEN EMPLOYMENT AGREEMENT
Effective as of November 27, 2000, the Company entered into an employment
agreement with Dennis P. O'Brien (the "O'Brien Employment Agreement"). Pursuant
to the O'Brien Employment Agreement, Mr. O'Brien serves as Vice President
Corporate Development of the Company. The employment agreement between Mr.
O'Brien and the Company provides for a term of employment that began on November
27, 2000 and continues until November 27, 2002. Under the terms of the
employment agreement, Mr. O'Brien is provided with the following: (i) a minimum
annual base salary of $150,000; (ii) an annual bonus equal to an amount between
20% and 50% of his base salary, if certain performance measures are met, as
determined within the sole discretion of the Board of Directors; and (iii)
effective as of November 27, 2000, the Company granted Mr. O'Brien an option to
acquire 8,000 shares of common stock of the Company pursuant to the Company's
1998 Incentive Stock Option Plan. All stock options granted to Mr. O'Brien will
fully vest immediately upon a "change in control" of the Company. Mr. O'Brien is
also eligible to participate in all employee benefit plans or programs of the
Company. Upon the Company's termination of Mr. O'Brien's employment without
"cause," Mr. O'Brien will be entitled to the payment of his annual base salary
then in effect for a period of twelve (12) months. This severance payment will
be payable at such intervals as the same would have been paid had Mr. O'Brien
remained in the active service of the Company. In addition, the Company will
provide Mr. O'Brien and his eligible dependents with group medical and life
insurance benefits during the period he is receiving severance payments
(provided that such benefits will cease earlier if he becomes eligible for
similar coverage with a new employer). If Mr. O'Brien resigns or the Company
terminates his employment for "cause," he will not be entitled to severance pay.
Furthermore, Mr. O'Brien is subject to noncompete and nondisclosure of
proprietary information covenants.
13
16
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of Directors
administers the compensation of the Company's senior officers. The Committee is
a standing Committee of the Board of Directors and is composed of outside
directors within the meaning of Section 162(m) or the Internal Revenue Code of
1986, as amended. The Committee's recommendations are subject to approval by the
full Board of Directors. The following report is submitted by the Committee
regarding compensation paid during fiscal year 2001.
The compensation program of the Company is designed to (1) allow the
Company to attract, motivate and retain the highest quality executives, (2)
align their financial interests with those of the Company's shareholders and (3)
reward behaviors that enhance shareholder return. The program is intended to
place a substantial amount of executive compensation "at risk" based on the
performance of the Company, its subsidiaries and the executive.
Each year the Committee establishes compensation guidelines for base
salary, annual incentive bonus awards and stock options for each of the
Company's officers. These guidelines reflect the competitive pay practices of
other companies, job responsibility and the need to attract, retain and reward
executive talent. After establishing the compensation guidelines, the Committee
used its assessment of the Company and individual performance to set actual
compensation relative to the guidelines.
EXECUTIVE OFFICER COMPENSATION GUIDELINES:
Base Salary Adjustments
Salaries for the Company's officers were established based on the
individual's performance and general market conditions. Salary levels are
intended to recognize the challenge of different positions taking into
consideration the type of activity of the position, the responsibility
associated with the job and the relative size of the operation.
Annual Incentive Bonus Awards
In addition to paying a base salary, the Company in recent years has
provided for incentive compensation as a component of overall compensation.
Incentive compensation as a component of overall compensation is tied to overall
performance, usually with a heavy emphasis on the profitability of the Company.
In fiscal year 2001, the maximum incentive compensation pool was established by
formula based upon the Company's consolidated financial performance. The fiscal
year 2001 key financial performance measures were total revenue and income
before income taxes ("IBT"). Individual awards from the incentive compensation
pool are recommended by senior management for consideration and approval by the
Committee.
Stock Options
Incentive Stock Option grants reward executives only to the extent that the
Company's share price increases for all shareholders. The exercise price per
share is set at the fair market value per share on the date of grant. Subject to
employment requirements, the options become fully exercisable over a period of
four years after the date of grant. During fiscal year 2001, stock options in
the total amount of 616,684 shares were granted under the Company's 1998
Incentive Stock Option Plan.
Thomas G. Baxter, Chair
Ronald P. Younkin
14
17
PERFORMANCE PRESENTATION
Set forth below is a graph which compares the cumulative total returns for
the Company's common stock against the cumulative total return (including
reinvestment of dividends) of the Standard & Poors (S&P) 500 Composite Stock
Index and respective peer group indices for the last five fiscal years, assuming
an investment of $100 in the Company's common stock and each of the respective
peer group indices noted on July 31, 1996. For the Company's common stock, a
peer group consisting of MasTec, Inc. has been used. This graph is not intended
to predict the Company's forecast of future financial performance.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
AMONG DYCOM INDUSTRIES, INC., THE S & P 500 INDEX AND A PEER GROUP*
DYCOM INDUSTRIES, INC. S & P 500 PEER GROUP
---------------------- --------- ----------
7/96 100.00 100.00 100.00
7/97 159.55 152.14 298.11
7/98 308.99 181.48 176.68
7/99 643.82 218.14 308.80
7/00 864.56 237.72 422.15
7/01 442.70 203.66 201.88
---------------
* $100 invested on 7/31/1996 in stock or index -- including reinvestment of
dividends.
15
18
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During fiscal year ended July 28, 2001, the brother-in-law of Thomas G.
Baxter, a member of the Board of Directors, was employed by Communications
Construction Group, Inc., a wholly owned subsidiary of the Company. Mr. Baxter's
brother-in-law earned approximately $199,390 as a cable splicer.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent (10%) of the Company's common stock, to file with the SEC initial
reports of ownership and reports of changes in ownership of common stock and
other equity securities of the Company. Certain officers, directors and greater
than ten percent (10%) stockholders are required by SEC regulation to furnish
the Company with all Section 16(a) forms they file. Based on the Company's
review of such reports, the Company believes that all such Section 16(a) filing
requirements were satisfied during fiscal year 2001, except that Mr. Werner
inadvertently failed to timely file a Form 3 and a Form 4 relating to one
transaction and Mr. O'Brien inadvertently failed to timely file a Form 3.
INDEPENDENT AUDITORS
The Board of Directors, upon the recommendation of its Audit Committee, has
selected Deloitte & Touche LLP to serve as the Company's independent auditors
for the next fiscal year. Representatives of Deloitte & Touche LLP are expected
to be present at the Annual Meeting for the purposes of responding to
shareholders' questions and making statements that they consider appropriate.
PROPOSALS FOR YEAR 2002
ANNUAL MEETING OF SHAREHOLDERS
Proposals by shareholders intended to be presented at the Year 2002 Annual
Meeting of Shareholders must be received by the Secretary of the Company no
later than June 17, 2002 to be considered for inclusion in the Company's proxy
materials for that meeting.
In addition, shareholders who desire to propose an item of business for
action at an annual meeting of shareholders (other than proposals submitted by
inclusion in the Proxy Statement), including the election of a director, must
follow certain procedures set forth in the Company's By-Laws. In general, notice
must be received by the Secretary of the Company not less than sixty (60) days
nor more than ninety (90) days prior to the anniversary date of the immediately
preceding annual meeting of shareholders. The notice should contain a brief
description of the proposal and the reason for conducting such business; the
name and address of the shareholder proposing such business, as it appears in
the Company's books; the class and number of shares of the Company that are
beneficially owned by the shareholder; and any financial interest of the
shareholder in such business. Shareholders should, however, consult the
Company's By-Laws to ensure that the specific requirements of such notice are
met. A copy of the Company's By-Laws may be obtained by any shareholder, without
charge, upon written request to the Secretary of the Company at 4440 PGA
Boulevard, Suite 500, Palm Beach Gardens, Florida 33410.
16
19
EXPENSES OF SOLICITATION
The Company will bear the cost of this solicitation of proxies. Proxies may
be solicited by directors, officers and regular employees of the Company,
without compensation, in person or by mail, telephone, facsimile transmission,
telephone or electronic transmission. The Company will reimburse brokers and
other custodians, nominees and fiduciaries for their reasonable out-of-pocket
expenses incurred in forwarding proxy material to beneficial owners.
OTHER MATTERS
The Board of Directors knows of no matters to come before the Annual
Meeting other than the matters referred to in this Proxy Statement. If, however,
any matters properly come before the Annual Meeting, the persons named as
proxies and acting thereon will have discretion to vote on those matters
according to their judgment to the same extent as the person delivering the
proxy would be entitled to vote.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Marc R. Tiller
--------------------------------------
Marc R. Tiller
Secretary
October 16, 2001
17
20
EXHIBIT A
DYCOM INDUSTRIES, INC.
AUDIT COMMITTEE CHARTER
The Board of Directors of Dycom Industries, Inc. (the "Company") has
adopted and approved a Charter for its Audit Committee (the "Committee"), which
is hereby set forth below:
ROLE AND INDEPENDENCE
The Committee assists the Board of Directors in fulfilling its
responsibility for oversight of the quality and integrity of the accounting,
auditing, internal control and financial reporting practices of the Company and
other such duties as directed by the Board of Directors. The membership of the
Committee shall consist of at least three directors, who are each free of any
relationship that, in the opinion of the Board of Directors, may interfere with
such member's individual exercise of independent judgment. Each Committee member
shall also meet the independence and financial literacy requirements for serving
on audit committees, and at least one member shall have accounting or related
financial management expertise, all as set forth in the applicable rules of the
New York Stock Exchange. The Committee is expected to maintain free and open
communication with the independent accountants, the internal auditors and the
management of the Company, including private executive sessions with each of
them at least annually. In discharging this oversight role, the Committee shall
have unrestricted access to the Company's books and records and the authority to
retain outside counsel, accountants or other consultants at the Committee's sole
discretion.
The Board of Directors shall appoint one member of the Committee as a
chairperson. The chairperson shall be responsible for the leadership of the
Committee, including preparing the agenda, presiding over the meetings, making
committee assignments and reporting to the Board of Directors. The chairperson
will also maintain regular liaison with the Chief Executive Officer, Chief
Financial Officer, the lead independent audit partner and the Director of
Internal Audit.
MEETINGS
The Committee shall meet at least four (4) times a year, or more frequently
as the Committee considers necessary. A majority of the members of the Committee
shall constitute a quorum for the transaction of business at any such meeting.
The Committee shall keep regular minutes of its proceedings and report the same
to the Board of Directors.
RESPONSIBILITIES
The Committee's primary responsibilities include:
Recommending to the Board of Directors annually, the independent
auditors to be selected or retained to audit the financial statements of
the Company. In so doing, the Committee will request from the auditors a
written affirmation that the auditors are in fact independent, discuss with
the auditors any relationships that may impact the auditors' independence,
and recommend to the Board of Directors any actions necessary to oversee
the auditors' independence.
A-1
21
Overseeing the independent auditor relationship by discussing with the
auditors the nature and rigor of the audit process, receiving and reviewing
audit reports, and providing the auditors full access to the Committee (and
the Board of Directors) to report on any and all appropriate matters.
Providing guidance and oversight to the internal audit activities of
the Company, including reviewing the organization, plans and results of
such activity.
Reviewing the audited financial statements and discussing them with
management and the independent auditors. These discussions shall include
consideration of the quality of the Company's accounting principles as
applied in its financial reporting, including review of estimates, reserves
and accruals, review of judgmental areas, review of audit adjustments,
whether or not recorded, and such other inquiries as may be appropriate.
Based on the review, the Committee shall make its recommendation to the
Board of Directors as to the inclusion of the Company's audited financial
statements in the Company's annual report on Form 10-K.
Reviewing with management and the independent auditors the quarterly
financial information prior to the release of earnings and the Company's
filing of Form 10-Q. This review may be performed telephonically by the
Committee or its chairperson.
Discussing with management, the internal auditors, and the external
auditors, the quality and adequacy of the Company's internal controls.
Discussing with management the status of pending litigation, taxation
matters and other areas of oversight as may be appropriate.
Reporting Committee activities to the Board of Directors and issuing
annually a report for inclusion in the Company's proxy statement as
required by the rules of the Securities and Exchange Commission.
A-2
22
EXHIBIT B
DYCOM INDUSTRIES, INC.
2001 DIRECTORS STOCK OPTION PLAN
1. DEFINITIONS AND RULES OF CONSTRUCTION
(a) Definitions. For purposes of this Plan, the following capitalized
words shall have the meanings set forth below:
"Administrator" means the Board or any executive officer or officers
of the Company designated by the Board.
"Annual Meeting" means an annual meeting of the Company's
stockholders.
"Award Document" means an agreement, certificate or other type or form
of document or documentation approved by the Board which sets forth the
terms and conditions of an Option. An Award Document may be in written,
electronic or other media, may be limited to a notation on the books and
records of the Company and, unless the Board requires otherwise, need not
be signed by a representative of the Company or a Participant.
"Beneficiary" means the person designated in writing by the
Participant to exercise or to receive an Option in the event of the
Participant's death or, if no such person has been designated in writing by
the Participant prior to the date of death, the Participant's estate. No
Beneficiary designation under the Plan shall be effective unless it is in
writing and is received by the Company prior to the date of death of the
applicable Participant.
"Board" means the Board of Directors of Dycom Industries, Inc.,
including any directors who may be Participants.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Common Stock" means the common stock of the Company, par value
$0.33 1/3 per share, or such other class of share or other securities as
may be applicable under Section 9(b).
"Company" means Dycom Industries, Inc., a Florida corporation, or any
successor to substantially all of its business that adopts the Plan.
"Date of Grant" means the date on which a Non-Employee Director is
granted an Option pursuant to this Plan.
"Effective Date" means November 20, 2001.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
"Fair Market Value" means, with respect to a share of Common Stock,
the fair market value thereof as of the relevant date of determination, as
determined in accordance with a valuation methodology approved by the
Board. In the absence of any alternative valuation methodology approved by
the Board, the Fair Market Value of a share of Common Stock shall be the
closing price of a share of Common
B-1
23
Stock as reported on the composite tape for securities listed on the New
York Stock Exchange, or such other national securities exchange as may be
designated by the Board, or, in the event that the Common Stock is not
listed for trading on a national securities exchange but is quoted on an
automated system, on such automated system, in any such case on the
valuation date (or, if there were no sales on the valuation date, the
closing price of a share of Common Stock as reported on said composite tape
or automated system for the most recent day during which a sale occurred).
"Non-Employee Director" means a director of the Company who is not an
officer or employee of the Company or any Subsidiary.
"Option" means an option to purchase Common Stock granted by the
Company pursuant to the terms of this Plan, which Option shall not be
intended to qualify, and shall not be treated, as an "incentive stock
option" within the meaning of Section 422 of the Code.
"Participant" means a Non-Employee Director who has been granted an
Option under this Plan.
"Plan" means this Dycom Industries, Inc. 2001 Directors Stock Option
Plan as described herein and as the same may be amended or otherwise
modified from time to time.
"Subsidiary" means (i) a domestic or foreign corporation or other
entity with respect to which the Company, directly or indirectly, has the
power, whether through the ownership of voting securities, by contract or
otherwise, to elect at least a majority of the members of such
corporation's board of directors or analogous governing body, or (ii) any
other domestic or foreign corporation or other entity in which the Company,
directly or indirectly, has an equity or similar interest and which the
Board designates as a Subsidiary for purposes of this Plan.
(b) Rules of Construction. The masculine pronoun shall be deemed to
include the feminine pronoun and the singular form of a word shall be deemed to
include the plural form, unless the context requires otherwise. Unless the text
indicates otherwise, references to sections are to sections of the Plan.
2. PURPOSE OF THE PLAN
The Plan is intended to encourage ownership of Common Stock by Non-Employee
Directors of the Company, upon whose judgment and interest the Company is
dependent for its successful operation and growth, in order to increase their
proprietary interest in the Company's success and to encourage them to serve as
directors of the Company.
The Plan is intended to comply with the terms and provisions of Rule 16b-3
promulgated under the Exchange Act. Any provision of the Plan or any Award
Document inconsistent with the terms of such Rule in effect shall be inoperative
and shall not affect the validity of the Plan, such Award Document or any other
provision thereof.
3. ADMINISTRATION
(a) Authority. Subject to the provisions of Section 16 of the Plan, the
Administrator shall have authority to interpret the provisions of the Plan, to
establish such rules and procedures as may be necessary or advisable to
administer the Plan and to make all determinations necessary or advisable for
the administration of the Plan, including, without limitation, factual
determinations; provided, however, that no such interpretation or determination
shall change or affect the selection of persons eligible to receive grants under
the Plan, the number of shares covered by any grant of Options under the Plan or
the terms and conditions thereof. The
B-2
24
Administrator shall also have authority to adjust the number of shares of common
stock subject to a future award of Options from time to time and at any time.
The interpretation and construction by the Administrator of any provision of the
Plan or of any Award Document shall be final and conclusive on all parties.
(b) Delegation. The Administrator may designate one or more employees of
the Company to carry out the Administrator's responsibilities under such
conditions as it may set.
4. ELIGIBILITY
Options shall be granted pursuant to the provisions hereof to persons who
are Non-Employee Directors.
5. SUBJECT TO THE PROVISIONS OF THE PLAN
(a) Plan Limit. Subject to Section 9, the Company is authorized to issue
up to 240,000 shares of Common Stock under the Plan (the "Plan Limit"). Such
shares may be authorized but unissued shares of Common Stock or reacquired
shares of Common Stock held in the treasury of the Company.
(b) Rules Applicable to Determining Shares Available for Issuance. For
purposes of determining the number of shares of Common Stock that remain
available for issuance, if any outstanding Option expires for any reason or is
terminated prior to the expiration date of the Plan as set forth in Section 14,
the shares of Common Stock allocable to any unexercised portion of such Option
may again be subject to an Option. In addition, the number of shares of Common
Stock tendered to pay the exercise price of an Option or to satisfy a
Participant's tax withholding obligations, if any, shall be added back to the
Plan Limit and again be available for the grant of Options.
6. TERMS AND CONDITIONS OF OPTIONS
(a) General. The terms and conditions of each Option grant shall be set
forth in an Award Document for such Option grant, which shall contain terms and
conditions not inconsistent with the Plan. Except in connection with a
transaction or event described in Section 9(b), nothing in the Plan shall be
construed as permitting the Company to reduce the exercise price of Options
previously granted under this Plan or options previously granted under any other
plan of the Company with respect to a Non-Employee Director without Board
approval.
(b) Initial Award. Subject to Section 5(a), each Non-Employee Director who
is initially elected or appointed to the Board after the Effective Date
(including a reelection or appointment immediately following a period during
which a director did not serve on the Board), shall receive, as of the date of
such initial election of appointment, an Option to purchase 6,000 shares of
Common Stock. Such Option shall have a per share exercise price equal to the
Fair Market Value of the Common Stock on the Date of Grant and shall be subject
to the vesting schedule provided for in Section 7(a) and such other terms and
conditions provided for herein. The grant of an Option shall impose no
obligation on a Participant to exercise such Option.
(c) Annual Awards. Subject to Section 5(a), at each Annual Meeting other
than the Annual Meeting coincident with a Non-Employee Director's initial
election or appointment to the Board (including a reelection or appointment
immediately following a period during which a director did not serve on the
Board), each Non-Employee Director who will remain on the Board following the
date of such Annual Meeting shall receive, as of such date, an annual award
consisting of an Option to purchase 2,000 shares of Common Stock (or such lesser
number determined by multiplying 2,000 by a fraction, the numerator of which is
the number of full or partial months since the immediately preceding Annual
Meeting during which such individual served
B-3
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on the Board in the capacity of a Non-Employee Director, and the denominator of
which is the number of full or partial months since the immediately preceding
Annual Meeting); provided, however, that at each Annual Meeting at which a
Non-Employee Director is reelected to the Board for at least a three-year term
(excluding a reelection that is within 12 months following an initial award
pursuant to Section 5(b)), such Non-Employee Director shall receive an annual
award under this Section 6(c) consisting of an Option to purchase 6,000 shares
of Common Stock. Such Option shall have a per share exercise price equal to the
Fair Market Value of the Common Stock on the Date of Grant and shall be subject
to the vesting schedule provided for in Section 7(a) and such other terms and
conditions provided for herein. The grant of an Option shall impose no
obligation on a Participant to exercise such Option.
(d) Manner, Time and Medium of Payment. An Option shall be exercised in
the manner set forth in the Award Document relating thereto and payment in full
of the exercise price for all shares of Common Stock shall be made at the time
of exercise. The exercise price for each Option shall be in United States
dollars in the form of cash, certified bank check or bank draft. In addition, in
accordance with rules and procedures as may be established by the Board in its
sole discretion, the Option may also be exercised through a "cashless exercise"
procedure involving a broker or dealer approved by the Board, that affords
Participants the opportunity to sell immediately some or all of the shares of
Common Stock underlying the exercised portion of the Option in order to generate
sufficient cash to pay the Option Price and/or to satisfy withholding tax
obligations (if any) related to the Option.
(e) Term. Unless terminated earlier pursuant to this Plan or an Award
Document, an Option shall be effective for ten years following the Date of Grant
of such Option.
(f) Assignability. No Option shall be assignable or transferable except by
will or by the laws of descent and distribution and no Option may be exercised
other than by a Participant or, after the death of a Participant, by that
Participant's Beneficiary, personal representative, heirs or legatees.
(g) Rights of a Stockholder. A Participant shall have no rights as a
stockholder with respect to shares of Common Stock covered by an Option until
the date the Participant or his nominee becomes the holder of record of such
shares. No adjustment will be made for dividends or other rights for which the
record date is prior to such date, except as provided in Section 9(b).
(h) Limitation on Exercise. An Option may not be exercised, and no shares
of Common Stock may be issued in connection with an Option, unless the issuance
of such shares has been registered under the Securities Act of 1933, as amended,
and qualified under applicable state "blue sky" laws, or the Company has
determined that an exemption from registration and from qualification under such
state "blue sky" laws is available. Notwithstanding any provision of the Plan or
any Award Document to the contrary, no Option may be granted or exercised at any
time when such Option or the granting or exercise thereof or payment therefore
may result in the violation of any law or governmental order or regulation.
7. VESTING AND TERMINATION OF SERVICE
(a) Vesting. Subject to Section 11 hereof, each Option granted to a
Participant shall vest and become exercisable in equal installments on each of
the first four successive anniversaries of the Date of Grant. Once exercisable,
an Option may be exercised at any time prior to its expiration, cancellation or
termination as provided in the Plan.
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26
(b) Termination of Status as a Director.
(i) Disability. In the event that a Participant ceases to be a
director by reason of such Participant's disability within the meaning of
Section 22(e)(3) of the Code, any outstanding Option held by such
Participant that is vested and exercisable as of the date of such
termination of services shall remain exercisable for a period of
ninety-days following the termination, at the end of which time such Option
shall terminate (unless the Option expires earlier by its terms) without
any payment. Any outstanding Option that is not vested and exercisable at
the date of such Participant's termination of services shall be terminated
without any payment.
(ii) Death. In the event that a Participant ceases to be a director
by reason of death, any outstanding Option held by such Participant that is
vested and exercisable on the date of his death shall remain exercisable
for a period of ninety-days following such termination, at the end of which
time such Option shall terminate (unless the Option expires earlier by its
terms) without any payment. Any outstanding Option that is not vested and
exercisable at the date of such Participant's termination of services shall
be terminated without any payment.
(iii) Termination of Services for Reasons Other than Death or
Disability. In the event that a Participant ceases to be a director for
any reason other than death or disability (as described in subparagraph (i)
above), any outstanding Option held by such Participant, whether or not
vested or exercisable, that has not been exercised as of the date of such
termination of services shall be terminated without any payment.
(c) Subject to Exchange Rules. Any and all grants of Options shall be
subject to all applicable rules and regulations of any exchange on which the
Common Stock may then be listed.
8. TAX WITHHOLDING
The Company or a Subsidiary, as appropriate, may require any individual
entitled to the issuance of shares of Common Stock pursuant to the exercise of
an Option to remit to the Company, prior to such payment, an amount sufficient
to satisfy any federal, state or local tax withholding requirements. If the
Company or a Subsidiary shall be required to withhold any amounts by reason of
any federal, state or local tax rules or regulations in respect of the issuance
of shares of Common Stock pursuant to the exercise of an Option, the Company or
a Subsidiary shall be entitled to deduct and to withhold such amount from any
cash payments to be made to the Participant. The Administrator may establish
such rules and procedures, including, without limitation, any rules or
procedures necessary to comply with Rule 16b-3, as it may deem necessary or
advisable in connection with the withholding of taxes relating to the exercise
of any Option.
9. NO RESTRICTION ON RIGHT OF COMPANY TO EFFECT CORPORATE CHANGES
(a) Authority of the Company and Stockholders. The existence of the Plan,
the Award Documents and the Options granted hereunder shall not affect or
restrict in any way the right or power of the Company or the stockholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of stock or of options, warrants or
rights to purchase stock or of bonds, debentures, preferred or prior preference
stocks whose rights are superior to or affect the Common Stock or the rights
thereof or which are convertible into or exchangeable for Common Stock, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
B-5
27
(b) Change in Capitalization. Notwithstanding any provision of the Plan or
any Award Document, the number and kind of shares authorized for issuance under
Section 5(a) may be equitably adjusted in the sole discretion of the
Administrator in the event of a stock split, stock dividend, recapitalization,
reorganization, merger, consolidation, extraordinary dividend, split-up,
spin-off, combination, exchange of shares, warrants or rights offering to
purchase Common Stock at a price substantially below Fair Market Value or other
similar corporate event affecting the Common Stock in order to preserve, but not
increase, the benefits or potential benefits intended to be made available under
the Plan. In addition, upon the occurrence of any of the foregoing events, the
number of outstanding Options and the number and kind of shares subject to any
outstanding Option and the purchase price per share, if any, under any
outstanding Option may be equitably adjusted (including by payment of cash to a
Participant) in the sole discretion of the Administrator in order to preserve
the benefits or potential benefits intended to be made available to Participants
granted Options. Such adjustments shall be made by the Administrator, in its
sole discretion, whose determination as to what adjustments shall be made, and
the extent thereof, shall be final. Unless otherwise determined by the
Administrator, such adjusted Options shall be subject to the same vesting
schedule and restrictions to which the underlying Option is subject.
10. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of Common Stock pursuant
to Options will be used for general corporate purposes.
11. EXCHANGE ACT
Notwithstanding anything contained in the Plan or any agreement under the
Plan to the contrary, if the consummation of any transaction under the Plan, or
the taking of any action by the Committee in connection with a change of control
of the Company, would result in the possible imposition of liability on a
Participant pursuant to Section 16(b) of the Exchange Act, the Administrator
shall have the right, in its sole discretion, but shall not be obligated, to
defer such transaction or the effectiveness of such action to the extent
necessary to avoid such liability, but in no event for a period longer than 180
days.
12. NO RIGHT TO CONTINUE AS A DIRECTOR
Nothing in the Plan or in any Option granted under the Plan shall confer
(or be deemed to confer) any right in any Participant to continue as a director
of the Company or any Subsidiary or shall interfere in any way with the right of
the Board or the stockholders of the Company, or the board of directors or
stockholders (including the Company) of any Subsidiary, to terminate such status
at any time, with or without cause and with or without notice, except as
otherwise provided by the certificate of incorporation or by-laws of the Company
or such Subsidiary or applicable law.
13. OPTIONS TO INDIVIDUALS SUBJECT TO NON-U.S. JURISDICTIONS
To the extent that Options under the Plan are awarded to individuals who
are domiciled or resident outside of the United States or to persons who are
domiciled or resident in the United States but who are subject to the tax laws
of a jurisdiction outside of the United States, the Administrator may, in its
sole discretion, adjust the terms of the Options granted hereunder to such
person (i) to comply with the laws of such jurisdiction and (ii) to permit the
grant of the Option not to be a taxable event to the Participant. The authority
granted under the previous sentence shall include the discretion for the
Administrator to adopt, on
B-6
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behalf of the Company, one or more sub-plans applicable to separate classes of
Participants who are subject to the laws of jurisdictions outside of the United
States.
14. TERM OF THE PLAN
Unless earlier terminated pursuant to Section 16, the Plan shall terminate
on the tenth anniversary of the Effective Date, except with respect to Options
then outstanding.
15. EFFECTIVE DATE
The Plan shall become effective on the Effective Date, subject to its
approval by the stockholders of the Company.
16. AMENDMENT AND TERMINATION
The Plan may be terminated and may be modified or amended by the Board at
any time and from time-to-time; provided, however, that (i) no modification or
amendment shall be effective without stockholder approval if such approval is
required by law or under the rules of New York Stock Exchange or the stock
exchange on which the shares are listed, and (ii) no such termination,
modification, or amendment of the Plan shall adversely alter or affect the terms
of any then outstanding Options previously granted hereunder without the consent
of the holder thereof.
17. GOVERNING LAW
The Plan and all agreements entered into under the Plan shall be construed
in accordance with and governed by the laws of the state of Florida and without
giving effect to principles of conflicts of laws.
B-7
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* FOLD AND DETACH HERE *
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DYCOM INDUSTRIES,INC.
First Union Center,Suite 500
4440 PGA Boulevard,Palm Beach Gardens,Florida 33410-6542
PROXY FOR THE 2001
ANNUAL MEETING OF SHAREHOLDERS - NOVEMBER 20, 2001
This Proxy is solicited on behalf of the Board of Directors of Dycom
Industries,Inc. (the "Company"). The undersigned hereby appoints Steven Nielsen
and Marc Tiller, and each of them, proxies and attorneys-in-fact, with the power
of substitution (the action of both of them or their substitutes present and
acting or if only one be present and acting,then the action of such one to be in
any event controlling) to vote all shares of common stock held of record by the
undersigned on October 9,2001 at the 2001 Annual Meeting of Shareholders (the
"Annual Meeting") of the Company scheduled to be held on November 20, 2001, and
at any adjournments thereof.
The shares represented by this proxy will be voted as directed by the
shareholder. If no direction is given when the duly executed proxy is
returned,such shares will be voted "FOR" the nominees named hereon and "FOR" the
approval of the Company's 2001 Directors Stock Option Plan. The shares will be
voted at the discretion of the proxies and attorneys-in-fact on the transaction
of such other business as may properly come before the Annual Meeting and any
adjournment thereof.
1. The election of four nominees for director as set forth in the Proxy
Statement accompanying the Notice of Annual Meeting of Shareholders and
listed below. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION
OF THE NOMINEES LISTED BELOW.
[ ] FOR THE NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY
Thomas G. Baxter Joseph M. Schell Tony G. Werner Kristina M. Johnson
To withhold authority to vote for any individual nominee,list the name:
--------------------------------------------------------------------------------
(continued on reverse side)
30
* FOLD AND DETACH HERE *
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2. The approval of the Company's 2001 Directors Stock Option Plan. THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE COMPANY'S 2001 DIRECTORS
STOCK OPTION PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To vote at the discretion of the proxies and attorneys-in-fact on the
transaction of such other business as may properly come before the
Annual Meeting and any adjournments thereof.
Dated: , 2001
-------------------------------
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Signature
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Signature (if held jointly)
Please date and sign as your name appears
hereon, and return in the enclosed envelope.
If acting as attorney, executor,
administrator, trustee, or guardian, you
should so indicate when signing. If the
signer is a corporation, please sign the
full corporate name by a duly authorized
officer. If the shares are held jointly,
each shareholder named is required to sign.
PLEASE VOTE, SIGN, AND RETURN.