<PAGE> 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:
<TABLE>
<S> <C>
[ ] 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
</TABLE>
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:
<PAGE> 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 28, 2000
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders (the "Meeting") of Dycom Industries,
Inc. (the "Company") will be held at 11:00 a.m. (EST), on Tuesday, November 28,
2000, at the DoubleTree Hotel, 4431 PGA Boulevard, Palm Beach Gardens, Florida.
The Meeting will be held for the following purposes:
1. To elect two Directors; and
2. To transact such other business as may properly come before the
Meeting or any adjournments of the Meeting.
The Board of Directors has fixed the close of business on Monday, October
9, 2000, as the record date for the determination of the shareholders entitled
to notice of and to vote at the Meeting.
IMPORTANT
Please mark, date, sign and return the enclosed proxy card promptly so that
your shares can be voted. If you attend the 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, 2000
<PAGE> 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 28, 2000
------------------------------
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 28,
2000, at the DoubleTree Hotel, 4431 PGA Boulevard, Palm Beach Gardens, Florida,
at 11:00 a.m. (EST), or at any adjournments thereof (the "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, 2000
(the "Record Date") will be entitled to notice of and to vote at the Meeting. On
September 29, 2000, the Company had 42,040,429 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 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.
This Proxy Statement and the accompanying proxy card are being mailed to
shareholders on or about October 16, 2000. 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 Meeting. Additionally, shareholders who attend the 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 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 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 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 29, 2000 and July 31, 1999, is
enclosed with this Proxy Statement, but such documentation does not constitute a
part of the proxy soliciting material.
<PAGE> 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. Steven E. Nielsen,
Walter L. Revell and Ronald P. Younkin are serving terms which expire at this
Meeting.(1) The Board of Directors, in accordance with the recommendation of its
Nominating Committee, has nominated as directors Steven E. Nielsen and Ronald P.
Younkin for a term expiring at the year 2003 Annual Meeting of the Shareholders.
If any herein named nominees for the office of director becomes 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.
<TABLE>
<CAPTION>
TERM
PRINCIPAL OCCUPATION EXPIRES
FOR PAST FIVE YEARS AT ANNUAL
AND DIRECTORSHIPS IN DIRECTOR MEETING
NOMINEES FOR ELECTION AGE PUBLIC COMPANIES SINCE FOR
--------------------- --- -------------------- -------- ---------
<S> <C> <C> <C> <C>
Steven E. Nielsen................. 37 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; Vice
President from February 26, 1996 to August
26, 1996; Officer in various Dycom
wholly-owned subsidiaries since May 3,
1993
Ronald P. Younkin................. 58 President and Chief Executive Officer of 1975 2003
Greenlawn Mobile Home Sales, Inc., which
sells mobile homes and operates mobile
home parks, since 1981
</TABLE>
---------------
(1) Walter L. Revell will resign as a director upon the expiration of his term
pursuant to the mandatory retirement provision in the Company's By-laws. The
provision states that "all members of the board of directors and all
officers of the corporation shall retire upon attaining sixty-five years of
age."
2
<PAGE> 5
<TABLE>
<CAPTION>
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
--------------------------- --- -------------------- -------- ---------
<S> <C> <C> <C> <C>
Thomas G. Baxter.................. 53 President and Chief Executive Officer of 1999 2001
Audible, Inc., a provider of spoken audio
via the internet, since February 2000
Operating Partner of Evercore Partners, an
investment company, from May 1998 to May
2000
Director of Audible, Inc. and Worldgate
Communications
Joseph M. Schell.................. 54 Chairman of Global Technology Investment 1999 2001
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 of Good Guys, Inc. and Sanmina
Corporation
Louis W. Adams, Jr................ 62 Retired Attorney 1969 2002
Thomas R. Pledger................. 62 Chairman of the Board of the Company; 1981 2002
Chairman of the Board and Executive
Chairman from March 10, 1999 to August 28,
2000; Chairman of the Board and Chief
Executive Officer from January 2, 1984 to
March 10, 1999
</TABLE>
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends a vote "FOR" the election of Steven E.
Nielsen and Ronald P. Younkin as Directors.
Board of Directors and Its Committees:
The Board of Directors held 11 meetings in the fiscal year ended July 29,
2000. 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, an Executive Committee, a Finance Committee and a
Nominating Committee.
3
<PAGE> 6
AUDIT COMMITTEE. The Audit Committee currently consists of Thomas G.
Baxter, Joseph M. Schell and Ronald P. Younkin. The functions of the Audit
Committee are to recommend to the Board of Directors the engagement of the
Company's independent auditors; determine the scope of services provided by the
independent auditors; review the results of the annual audit and the Company's
annual financial statements; and oversee the Company's internal control and
internal auditing activities. The Audit Committee met 5 times during fiscal
2000.
COMPENSATION COMMITTEE. The Compensation Committee currently consists of
Louis W. Adams, Walter L. Revell and Ronald P. Younkin. The functions of the
Compensation Committee are to recommend to the Board of Directors the
compensation of the Company's officers and employees; and administer the
Company's Incentive Stock Option Plans. The Compensation Committee met 7 times
during fiscal 2000.
EXECUTIVE COMMITTEE. The Executive Committee currently consists of Thomas
G. Baxter, Steven Nielsen and Thomas R. Pledger. 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 met twice during fiscal 2000.
FINANCE COMMITTEE. The Finance Committee currently consists of Thomas G.
Baxter, Walter L. Revell and Joseph M. Schell. The functions of the Finance
Committee are to set policy for short-term investments, review borrowing
arrangements and recommend changes in the capital structure and operating budget
of the Company. The Finance Committee did not meet during fiscal 2000.
NOMINATING COMMITTEE. The Nominating Committee currently consists of Louis
W. Adams, Steven Nielsen and Thomas R. Pledger. The functions of the Nominating
Committee are to recommend to the Board of Directors the officers of the
Company, nominees for election as directors by the Company's shareholders,
persons to fill vacancies on the Board, and directors to serve on the five
committees of the Board. The Committee met twice during fiscal 2000. The
Nominating Committee will consider nominees for director that are recommended by
shareholders in accordance with the procedures set forth in the Company's
By-Laws.
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 meeting of the Board of
Directors attended; $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 all other committee
meetings; 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
<PAGE> 7
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
As of August 29, 2000, the following table sets forth certain information
regarding the beneficial ownership of common stock by each director, each Named
Executive Officer, 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 and by all such directors
and executive officers of the Company. The Company understands that, except as
otherwise noted, each such person has sole voting and investment power with
respect to such shares.
<TABLE>
<CAPTION>
NUMBER OF SHARES AND NATURE PERCENT
NAME OF BENEFICIAL OWNERSHIP OF CLASS(1)
---- --------------------------- -----------
<S> <C> <C>
Directors:
Louis W. Adams, Jr...................................... 23,027 *
Thomas G. Baxter........................................ 6,750(2) *
Steven E. Nielsen....................................... 224,926(2) *
Thomas R. Pledger....................................... 746,212 1.78%
Walter L. Revell........................................ 13,500 *
Joseph M. Schell........................................ 36,000(2) *
Ronald P. Younkin....................................... 208,957(3) *
Other Named Officers:
Richard L. Dunn....................................... -- --
Robert J. Delark...................................... -- --
Randal L. Martin...................................... 1,732(2) *
All directors and executive officers as a group of 10
persons, including the above.......................... 1,261,104 3.01%
</TABLE>
---------------
* Less than 1%.
(1) Class includes outstanding shares and stock options held by directors and
executive officers that are exercisable within 60 days after August 29,
2000.
(2) Includes shares that may be acquired within 60 days after August 29, 2000
upon the exercise of stock options (Mr. Baxter - 6,000; Mr.
Nielsen - 141,926; Mr. Schell - 6,000; and Mr. Martin - 1,312).
(3) Excludes 27,052 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.
5
<PAGE> 8
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
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
OTHER STOCK
FISCAL ANNUAL OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION # OF SHARES(2) COMPENSATION(3)
--------------------------- ------ -------- -------- ------------ ------------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Steven E. Nielsen.......................... 2000 $416,000 $416,000 $ 7,338 45,000 $ 4,656
President and CEO 1999 $337,431 $337,431 $ 7,200 281,250 $ 6,714
1998 $259,000 $259,000 -0- 225,000 $ 3,415
Thomas R. Pledger(4)....................... 2000 $468,000 -0- $10,292 -0- $137,060
Executive Chairman 1999 $468,000 $468,000 $ 3,000 -0- $120,311
1998 $416,000 $416,000 -0- -0- $101,192
Robert J. Delark(5)........................ 2000 $109,154 $ 45,000 $ 3,655 37,500 $ 783
Senior Vice President and 1999 -0- -0- -0- -0- -0-
Chief Administrative Officer 1998 -0- -0- -0- -0- -0-
Richard L. Dunn(6)......................... 2000 $108,327 $ 45,000 -0- 37,500 $ 783
Senior Vice President 1999 -0- -0- -0- -0- -0-
and CFO 1998 -0- -0- -0- -0- -0-
Randal L. Martin(7)........................ 2000 $ 99,327 $ 35,000 -0- 5,250 $ 2,365
Vice President and 1999 -0- -0- -0- -0- -0-
Controller 1998 -0- -0- -0- -0- -0-
</TABLE>
---------------
(1) Bonus is earned in fiscal year 2000, but not distributed until October 2001.
(2) Adjusted to reflect 3-for-2 stock splits distributed on February 16, 2000
and January 4, 1999, respectively.
(3) All other compensation for fiscal year 2000 consists of: (i) an annual
insurance premium of $133,000 for a whole life insurance policy owned by Mr.
Pledger; (ii) Company contributions to the Dycom retirement savings plan
(Mr. Pledger $1,744; Mr. Nielsen $2,340; and Mr. Martin $798); and (iii)
Company paid premiums for group term life insurance and long-term disability
(Mr. Pledger $2,316; Mr. Nielsen $2,316; Mr. Dunn $783; Mr. Delark $783; and
Mr. Martin $1,567).
(4) Effective as of August 28, 2000, Mr. Pledger resigned as the Company's
Executive Chairman.
(5) Effective as of January 27, 2000, Mr. Delark was appointed the Company's
Chief Administrative Officer. See "Delark Employment Agreement" on page 10.
(6) Effective as of January 28, 2000, Mr. Dunn was appointed the Company's Chief
Financial Officer. See "Dunn Employment Agreement" on page 10.
(7) Effective as of August 23, 1999, Mr. Martin was appointed the Company's Vice
President and Controller.
6
<PAGE> 9
OPTION GRANTS IN FISCAL YEAR ENDED JULY 29, 2000
The following table sets forth additional information concerning the
options granted to the Named Executive Officers of the Company during fiscal
year 2000 under the Company's 1991 and 1998 Incentive Stock Option Plans.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
% OF ASSUMED ANNUAL RATES OF STOCK
TOTAL PRICE APPRECIATION FOR
OPTIONS OPTIONS EXERCISE OPTION TERM
GRANTED(1) GRANTED TO PRICE(2) EXPIRATION ------------------------------
NAME (# OF SHARES) EMPLOYEES ($/SHARE) DATE 5% 10%
---- ------------- ---------- ---------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Steven E. Nielsen................... 45,000(3) 8.2% $26.0833 8/23/2009 $ 738,164 $1,870,653
President and CEO
Thomas R. Pledger................... -0- -0- -0- -- -0- -0-
Executive Chairman
Robert J. Delark.................... 37,500(4) 6.9% $31.0833 1/27/2010 $ 733,055 $1,857,704
Senior Vice President and Chief
Administrative Officer
Richard L. Dunn..................... 37,500(4) 6.9% $30.2083 1/28/2010 $ 712,419 $1,805,409
Senior Vice President and CFO
Randal L. Martin.................... 5,250(4) 1.0% $26.0833 8/23/2009 $ 86,119 $ 218,243
Vice President and Controller
</TABLE>
---------------
(1) Adjusted to reflect 3-for-2 stock split distributed on February 16, 2000.
(2) 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.
(3) Options under the 1991 Plan vest in 25 percent increments beginning on the
first anniversary of the date of grant and have terms of five to ten years.
Stock options reported here were granted on August 23, 1999 and have a term
of ten years. Mr. Nielsen's options will be fully vested and immediately
exercisable upon a "change in control" of the Company.
(4) Options under the 1998 Plan vest in 25 percent increments 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 23, 1999 (Mr. Martin - 5,250),
January 27, 2000 (Mr. Delark - 37,500) and January 28, 2000 (Mr. Dunn -
37,500). Messrs. Delark and Dunn's options will be fully vested and
immediately exercisable upon a "change in control" of the Company.
7
<PAGE> 10
AGGREGATED 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 2000 and unexercised options held as of the fiscal year ended
July 29, 2000.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-THE-
UNDERLYING UNEXERCISED MONEY OPTIONS AT JULY 29,
SHARES ACQUIRED OPTIONS AT JULY 29, 2000(1) 2000($)(2)
ON EXERCISE VALUE ----------------------------- ----------------------------
NAME (# OF SHARES)(1) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------------ ---------- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Steven E. Nielsen.............. 144,558 $4,053,432 41,800 387,001 $816,749 $8,425,262
President and CEO
Thomas R. Pledger.............. -0- -0- -0- -0- -0- -0-
Executive Chairman
Robert J. Delark............... -0- -0- -0- 37,500 -0- $ 371,876
Senior Vice President and
Chief Administrative Officer
Richard L. Dunn................ -0- -0- -0- 37,500 -0- $ 404,689
Senior Vice President and CFO
Randal L. Martin............... -0- -0- -0- 5,250 -0- $ 78,313
Vice President and Controller
</TABLE>
---------------
(1) Adjusted to reflect 3-for-2 stock split distributed on February 16, 2000.
(2) The closing market value of the Company's common stock on July 28, 2000, as
reported on the NYSE Composite Transactions Tape, was $41.00.
8
<PAGE> 11
EMPLOYMENT AGREEMENTS
PLEDGER EMPLOYMENT AGREEMENT
Effective as of March 10, 1999, the Company entered into an amended and
restated employment agreement with Thomas R. Pledger (the "Pledger Employment
Agreement"). Pursuant to the Pledger Employment Agreement, Mr. Pledger resigned
as Chief Executive Officer of the Company and was appointed Executive Chairman.
The employment agreement between Mr. Pledger 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. Pledger is provided with the
following: (i) a minimum annual base salary of $468,000; (ii) an annual bonus as
determined within the sole discretion of the Board of Directors; and (iii) a
non-tax qualified retirement benefit in the amount of $133,000 for each year of
employment under the employment agreement. Mr. Pledger is also eligible to
participate in all employee benefit plans or programs of the Company. Upon the
Company's termination of Mr. Pledger's employment without "cause" or upon Mr.
Pledger's resignation for "good reason," Mr. Pledger 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 the termination or resignation.
In addition, Mr. Pledger 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. Pledger resigns his employment or is terminated for cause,
he will not be entitled to any severance pay. Mr. Pledger 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. Pledger a
gross-up payment such that the net amount of the severance payment retained by
Mr. Pledger 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. Pledger 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.
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 will
serve 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) effective as of
March 10, 1999, the Company granted Mr. Nielsen an option to acquire 150,000
shares of common stock of the Company pursuant to the Company's 1998 Incentive
Stock Option Plan. The option will vest in equal 25% increments on each of the
first four anniversaries of the date of grant if Mr. Nielsen is employed with
the Company on such dates (provided that the option, as well as all other stock
options granted to Mr. Nielsen, will fully vest immediately upon a "change in
control" of the Company), has a ten-year term and an exercise price per share
equal to the closing price of the Company's common stock as of March 10, 1999.
Mr. Nielsen is also eligible to participate in all employee benefit plans or
programs of the Company. Upon the Company's
9
<PAGE> 12
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 will serve as 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)
effective as of January 27, 2000, the Company granted Mr. Delark an option to
acquire 25,000 shares of common stock of the Company pursuant to the Company's
1998 Incentive Stock Option Plan. All stock options granted to Mr. Delark will
fully vest immediately upon a "change in control" of the Company. Mr. Delark is
also eligible to participate in all employee benefit plans or programs of the
Company. 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 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 will serve as 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
10
<PAGE> 13
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) effective as of January 28, 2000, the
Company granted Mr. Dunn an option to acquire 25,000 shares of common stock of
the Company pursuant to the Company's 1998 Incentive Stock Option Plan. All
stock options granted to Mr. Dunn will fully vest immediately upon a "change in
control" of the Company. Mr. Dunn is also eligible to participate in all
employee benefit plans or programs of the Company. 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.
TERMINATION AGREEMENT
PLEDGER TERMINATION AGREEMENT
Pursuant to a termination agreement between the Company and Thomas R.
Pledger (the "Pledger Termination Agreement"), Mr. Pledger resigned on August
28, 2000 as Executive Chairman of the Company. Under the terms of the Pledger
Termination Agreement, the Company paid Mr. Pledger a $1,850,000 single sum
severance payment. Mr. Pledger will serve as a consultant to the Company until
March 9, 2004 for a $6,250 weekly consulting fee. During this consulting period,
the Company will also continue to provide Mr. Pledger with the medical and
dental benefits he was receiving as an officer of the Company. Mr. Pledger will
be subject to a non-compete covenant until March 9, 2004 and a confidentiality
covenant until March 9, 2009. Mr. Pledger will continue as Chairman of the Board
of Directors.
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of Directors
administers the compensation of the Company's officers. During fiscal year 2000,
the Committee was composed of three directors who were not employed by the
Company. 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 2000.
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.
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<PAGE> 14
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. The salary of
Mr. Nielsen, the Company's Chief Executive Officer, was fixed by an employment
agreement which expires on March 9, 2004.
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 2000, the maximum incentive compensation pool was established by
formula based upon the Company's consolidated financial performance. The fiscal
year 2000 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 2000, stock options in
the total amount of 560,209 shares were granted under the 1991 and 1998
Incentive Stock Option Plans.
Walter L. Revell, Chairman
Louis W. Adams, Jr.
Ronald P. Younkin
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<PAGE> 15
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, 1995. 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
<TABLE>
<CAPTION>
DYCOM INDUSTRIES,
INC. S&P 500 PEER GROUP
----------------- ------- ----------
<S> <C> <C> <C>
7/95 100.00 100.00 100.00
7/96 174.51 116.57 207.81
7/97 278.43 177.35 619.51
7/98 539.22 211.55 367.17
7/99 1123.53 254.29 641.73
7/00 1508.75 277.12 877.28
</TABLE>
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<PAGE> 16
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During fiscal year ended July 29, 2000, 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 $163,900 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 there was compliance with all
filing requirements of Section 16(a) applicable to directors and executive
officers of the Company during fiscal year 2000.
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 Meeting for the purposes of responding to shareholders'
questions and making statements that they consider appropriate.
PROPOSALS FOR YEAR 2001
ANNUAL MEETING OF SHAREHOLDERS
Proposals by shareholders intended to be presented at the Year 2001 Annual
Meeting of Shareholders must be received by the Secretary of the Company no
later than June 17, 2001 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.
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<PAGE> 17
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 Meeting other
than the matters referred to in this Proxy Statement. If, however, any matters
properly come before the 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, 2000
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<PAGE> 18
DYCOM INDUSTRIES, INC.
First Union Center, Suite 500
4440 PGA Boulevard, Palm Beach Gardens, Florida 33410-6542
PROXY FOR THE 2000
ANNUAL MEETING OF SHAREHOLDERS -- November 28, 2000
This Proxy is solicited on behalf of the Board of Directors of Dycom Industries,
Inc. (the "Company"). The undersigned hereby appoints Thomas R. Pledger and
Steven Nielsen, 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, 2000 at the 2000 Annual Meeting of Shareholders of
the Company scheduled to be held on November 28, 2000, 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. 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 meeting and any
adjournment thereof.
PLEASE VOTE, SIGN, AND RETURN.
1. The election of two nominees for director as set forth in the Proxy
Statement accompanying the Notice of Meeting 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
Steven E. Nielsen Ronald P. Younkin
To withhold authority to vote for any individual nominee, list the name:
----------------------------------------------------------------------------
2. 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 meeting
and any adjournments thereof.
Dated: ___________________________________ , 2000
_________________________________________________
Signature
_________________________________________________
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.
