Exhibit 10.16
EMPLOYMENT AGREEMENT
This employment agreement (the "EMPLOYMENT AGREEMENT") is made
this 17th day of March 2003 (the "EFFECTIVE DATE"), by and between Xxxxxxx X.
Xxxxxx (the "EMPLOYEE") and Dycom Industries, Inc., a Florida corporation (the
"COMPANY").
1. EMPLOYMENT.
Subject to the terms and conditions hereof, as of the
Effective Date, the Company hereby agrees to employ the Employee as the General
Counsel of the Company. The Employee agrees to perform such specific duties and
accept such responsibilities as the board of directors of the Company (the
"BOARD") and the Chief Executive Officer may from time to time establish that
are reasonably related and consistent with the Employee's position as the
General Counsel of the Company. The Employee shall report directly to the Chief
Executive Officer and the Chief Financial Officer. The Employee hereby accepts
employment by the Company as General Counsel, subject to the terms and
conditions hereof, and agrees to devote his full business time and attention to
his duties hereunder, to the best of his abilities.
2. TERM OF EMPLOYMENT.
The Employee's employment pursuant to the Employment Agreement
shall commence on the Effective Date and shall terminate upon the earlier to
occur of (i) termination pursuant to paragraph 5 hereof or (ii) the second
anniversary of the Effective Date (the "EMPLOYMENT TERM").
3. COMPENSATION, BENEFITS AND EXPENSES.
(a) For services rendered under this Employment Agreement, the
Company will pay the Employee (i) during the period commencing on the Effective
Date and continuing up to and including July 26, 2003, a base annual salary of
$140,000 and (ii) from the period commencing on July 27, 2003 and continuing
through the Employment Term, a base annual salary of $150,000 (such applicable
annual rate referred to herein as the "BASE SALARY"). Payment will be made on
the regularly scheduled pay dates of the Company, subject to all appropriate
withholdings or other deductions required by applicable law or by the Company's
established policies applicable to employees of the Company. The Board may
increase the Base Salary in its sole discretion, but shall not reduce the Base
Salary below the rate established by the Employment Agreement without the
Employee's written consent.
(b) During the Employment Term, the Employee shall be entitled
to participate in the Company's annual incentive plan, under which the Employee
shall be eligible to receive an annual target bonus equal to an amount between
twenty percent (20%) and fifty percent (50%) of Base Salary if certain
performance criteria and measures are satisfied, as determined by and within the
sole discretion of the Board.
(c) During the Employment Term, in addition to the
compensation payable to the Employee as described above, the Employee shall be
entitled to participate in all the employee benefit plans or programs of the
Company that are available to employees of the Company generally ("EMPLOYEE
BENEFITS").
(d) As soon as administratively practicable following the
Effective Date, the Board shall grant the Employee options (the "OPTIONS") to
acquire 10,000 shares of common stock of the Company, pursuant to the terms of
the Company's 1998 Incentive Stock Option Plan (the "OPTION PLAN"). In addition,
during the Employment Term, the Employee shall be eligible for subsequent annual
Option grants under the Option Plan, or any such successor stock option plan, at
the time such grants are made under the Option Plan to management employees of
the Company generally, with a targeted grant of Options to acquire between 5,000
and 10,000 shares of common stock of the Company per year, as determined by and
within the sole discretion of the Board.
(e) During the Employment Term, the Company shall reimburse
the Employee for such reasonable out-of-pocket expenses as he may incur from
time to time for and on behalf of the furtherance of the Company's business,
provided that the Employee submits to the Company satisfactory documentation or
other support for such expenses in accordance with the Company's expense
reimbursement policy.
4. COVENANTS OF THE EMPLOYEE.
(a) The Employee agrees with the Company that, during the
Employment Term, the Employee shall not directly or indirectly, whether as a
proprietor, partner, joint venturer, employer, agent, employee, consultant,
officer or beneficial or record owner of more than one percent (1%) of the stock
of any corporation or association of any nature, engage in any business which is
competitive to the business conducted by the Company, its subsidiaries or its
affiliates (collectively, the "COMPANIES"), in any geographic area in which the
Companies have engaged or will engage during the Employment Term (including,
without limitation, any area in which any customer of the Companies may be
located).
(b) The Employee agrees with the Company that at no time
during the Employment Term, or at any time following his termination of
employment with the Company, will the Employee directly or indirectly divulge to
any person, entity or other organization or appropriate for the Employee's own
use or for the use of others any trade secrets or confidential information or
confidential knowledge pertaining to the business of the Companies
(collectively, the "PROPRIETARY INFORMATION"). The Employee shall retain all
copies and extracts of any written confidential information acquired or
developed by him during his employment for the sole benefit of the Companies.
The Employee further agrees that he will not remove or take from the Companies'
premises (or, if previously removed or taken, he will, at the Company's request,
promptly return) any written confidential information or any copies or extracts
thereof. The Employee shall promptly make all disclosures, execute all
instruments and papers, and perform all acts reasonably necessary to vest and
confirm to the Company, fully and completely, all rights created or contemplated
by this paragraph 4(b).
(c) In the event the Employee resigns his employment with the
Company for any reason, or if the Company terminates his employment without
Cause (as defined in paragraph 5(a) below), other than a termination without
Cause during the six-month period immediately following a Change of Control (as
defined in paragraph 5(f) below), the Employee separately agrees, being fully
aware that the performance of the Employment Agreement is important to preserve
the present value of the property and business of the Company that for the
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Severance Period (as defined below) (the "RESTRICTED PERIOD"), the Employee
shall not directly or indirectly engage in any business, whether as proprietor,
partner, joint venturer, employer, agent, employee, consultant, officer or
beneficial or record owner of more than one percent (1%) of the stock of any
corporation or association of any nature which is competitive to the business
conducted by the Companies, in the geographical service area in which the
Companies have engaged or will engage during such period (including, without
limitation, any area in which any such customer of the Companies may be
located).
(d) As a separate and independent covenant, the Employee
agrees with the Company that, for so long as the Employee is employed by the
Company and for the Restricted Period, he will not in any way, directly or
indirectly, for the purpose of conducting or engaging in any competitive
business with the Companies, call upon, solicit, advise or otherwise do, or
attempt to do, business with any person who is, or was, during the then most
recent 12-month period, a customer of the Companies, or solicit, induce, hire,
attempt to hire, interfere with or attempt to interfere with, any person who is,
or was during the then most recent 12-month period, an employee, officer,
representative or agent of the Companies.
(e) The Employee agrees that the breach by the Employee of any
of the foregoing covenants is likely to result in immediate and irreparable
harm, directly or indirectly, to the Companies. The Employee, therefore,
consents and agrees that if the Employee violates any of such covenants, the
Companies shall be entitled, among and in addition to any other rights or
remedies available under the Employment Agreement or at law or in equity, to
temporary and permanent injunctive relief, without bond or other security, to
prevent the Employee from committing or continuing a breach of such covenants.
Such injunctive relief in any court shall be available to the Companies, in lieu
of, or prior to or pending determination in, any arbitration proceeding.
(f) It is the desire, intent and agreement of the Employee and
the Company that the restrictions placed on the Employee by this paragraph 4 be
enforced to the fullest extent permissible under the law and public policy
applied by any jurisdiction in which enforcement is sought. Accordingly, if and
to the extent that any portion of this paragraph 4 shall be adjudicated to be
unenforceable, such portion shall be deemed amended to delete therefrom or to
reform the portion thus adjudicated to be invalid or unenforceable, such
deletion or reformation to apply only with respect to the operation of such
portion in the particular jurisdiction in which such adjudication is made.
(g) Except with respect to the equitable relief contemplated
under paragraph 4(e), any controversy or claim arising out of or relating to the
Employment Agreement shall be resolved by arbitration in Palm Beach County,
Florida, in accordance with the rules then in effect of the American Arbitration
Association, and judgment upon the award rendered may be entered in any court
having jurisdiction thereon. The prevailing party in any such arbitration
proceeding will be reimbursed by the other party hereto for its reasonable
attorney fees and fees and costs incurred attributable to such arbitration.
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5. TERMINATION.
(a) TERMINATION FOR CAUSE. The Company shall have the right to
terminate the Employee's employment at any time and for any reason. If the
Employee is terminated for Cause (as defined below), the Company shall not have
any obligation to pay the Employee any Base Salary or other compensation or to
provide any employee benefits subsequent to the date of such Employee's
termination of employment (unless required by applicable law), including,
without limitation, Severance Benefits (as defined in paragraph 5(b) hereof).
Termination for "CAUSE" shall mean termination of employment for any of the
following reasons:
(i) The Employee entering a plea of no-contest with
respect to, or being convicted by a court of
competent and final jurisdiction of, any crime,
whether or not involving the Companies, that
constitutes a felony in the jurisdiction involved;
(ii) any willful misconduct by the Employee that is
injurious to the financial condition or business
reputation of the Company;
(iii) Employee materially breaches a duty of loyalty owed
to the Companies or, as a result of his gross
negligence, breaches a duty of care owed to
Companies; or
(iv) Employee materially breaches this Employment
Agreement or fails or refuses to perform any of his
material duties as required by this Employment
Agreement in any respect, after Employee being given
written notice of such breach, failure or refusal,
and Employee's failure to cure the same within 30
calendar days of receipt of such notice.
(b) TERMINATION WITHOUT CAUSE. Subject to the provisions of
paragraph 5(c), if, prior to the expiration of the Employment Term, the Company
terminates the Employee's employment without Cause, the Company shall, subject
to the Employee's execution of a general release of claims against the Company
in a form satisfactory to the Company, provide the Employee with Severance
Benefits. "SEVERANCE BENEFITS" mean (i) Base Salary (at the rate then in effect
thirty (30) days prior to such termination) for the twelve (12) month period
immediately following Employee's termination of employment without Cause (such
period being referred to hereunder as the "SEVERANCE PERIOD"), at such intervals
as the same would have been paid had the Employee remained in the active service
of the Company, and (ii) the Company shall also provide the Employee and his
eligible dependents with group medical and life insurance after termination of
the Employee's employment without Cause (to the extent such eligible dependents
were participating in the Company's group medical and life insurance programs
prior to the Employee's termination of employment), until the earlier of (x) the
date the Employee becomes eligible for group medical and life insurance coverage
as the result of the Employee accepting another position with a new employer or
(y) the termination of the Severance Period, whichever shall occur first.
(c) CONDITIONS APPLICABLE TO SEVERANCE PERIOD. If, during the
Severance Period, the Employee breaches any of his obligations under the
Employment Agreement (including, but not limited to, paragraph 4) or such other
agreement between the Company and the Employee, the Company may, upon written
notice to the Employee terminate the Severance
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Period and cease to make any payments or provide any benefits, including,
without limitation, Severance Benefits.
(d) RESIGNATION BY THE EMPLOYEE. In the event the Employee
resigns his employment with the Company, the Employee: (i) shall provide the
Company with sixty (60) days prior written notice; (ii) shall not make any
public announcements concerning his resignation prior to the resignation date
without the written consent of the Company and (iii) shall continue to perform
faithfully the duties assigned to him under the Employment Agreement (or such
other duties as the Company or Board may assign to him) from the date of such
notice until the termination date. In addition, in the event the Employee
resigns his employment with the Company for any reason, the Company shall not
have any obligation to pay the Employee any Base Salary or other compensation or
to provide any employee benefits subsequent to the date of such Employee's
termination of employment (unless required by applicable law), including,
without limitation, Severance Benefits.
(e) TERMINATION UPON DEATH OR DISABILITY. Unless otherwise
terminated earlier pursuant to the terms of the Employment Agreement, the
Employee's employment under the Employment Agreement shall terminate upon his
death and may be terminated by the Company upon giving not less than thirty (30)
days written notice to the Employee in the event that the Employee, because of
physical or mental disability or incapacity, is unable to perform (or, in the
opinion of a physician, is reasonably expected to be unable to perform) his
duties hereunder for an aggregate of one hundred eighty (180) days during any
twelve-month period ("DISABLED"). All questions arising with respect to whether
the Employee is Disabled shall be determined by a reputable physician mutually
selected by the Company and the Employee at the time such question arises. If
the Company and the Employee cannot agree upon the selection of a physician
within a period of seven (7) days after such question arises, then the Chief of
Staff of Good Samaritan Hospital in Palm Beach County, Florida shall be asked to
select a physician to make such determination. The determination of the
physician selected pursuant to the above provisions of this paragraph 5(e) as to
such matters shall be conclusively binding upon the parties hereto.
(f) TERMINATION UPON A CHANGE OF CONTROL. In the event of a
"CHANGE OF CONTROl," notwithstanding any provisions in the Option Plan or any
successor stock option plan to the contrary, all outstanding Options under the
Option Plan or any successor stock option plan, to the extent not already
vested, shall become fully and immediately vested as of the date of the
occurrence of a Change of Control. For purposes of the Employment Agreement, a
"CHANGE OF CONTROL" shall be deemed to have occurred with respect to the Company
if any one or more of the following events occur:
(i) A tender offer is made and consummated for the
ownership of fifty percent (50%) or more of the
outstanding voting securities of the Company;
(ii) a "person," within the meaning of Section 3(a)9 or
Section 13(d) (as in effect on the date hereof) of
the Securities Exchange Act of 1934, shall acquire
fifty percent (50%) or more of the outstanding voting
securities of the Company;
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(iii) substantially all of the assets of the Company are
sold or transferred to another person, corporation or
entity that is not a wholly owned subsidiary of the
Company; or
(iv) a change in the Board such that a majority of the
seats on the Board are occupied by individuals who
were neither nominated by a majority of the directors
of the Company as of the close of business on the
Effective Date nor appointed by directors so
nominated.
6. ASSIGNMENT AND SUCCESSION.
(a) The services to be rendered and obligations to be
performed by the Employee under the Employment Agreement shall not be assignable
or transferable.
(b) The Employment Agreement shall inure to the benefit of and
be binding upon and enforceable by the Company and the Employee and their
respective successors, permitted assigns, heirs, legal representatives,
executors, and administrators. If the Company shall be merged into or
consolidated with another entity, the provisions of the Employment Agreement
shall be binding upon and inure to the benefit of the entity surviving such
merger or resulting from such consolidation. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to expressly assume and agree to perform the Employment Agreement in
the same manner that the Company would be required to perform it if no such
succession had taken place. The provisions of this paragraph 6(b) shall continue
to apply to each subsequent Company of the Employee hereunder in the event of
any subsequent merger, consolidation, or transfer of assets of such subsequent
Company.
7. NOTICES.
All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telegram or telex or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this paragraph 7):
if to the Company:
Dycom Industries, Inc.
First Union Center
0000 XXX Xxxxxxxxx
Xxxxx 000
Xxxx Xxxxx Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Xxxxxx X. Xxxxxxx
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if to the Employee:
Xxxxxxx X. Xxxxxx
000 Xx Xxxx Xxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
8. WAIVER OF BREACH.
(a) The waiver by the Company or the Employee of a breach of
any provision of the Employment Agreement shall not operate or be construed as a
waiver by such party of any subsequent breach.
(b) The parties hereto recognize that the laws and public
policies of various jurisdictions may differ as to the validity and
enforceability of covenants similar to those set forth herein. It is the
intention of the parties that the provisions hereof be enforced to the fullest
extent permissible under the laws and policies of each jurisdiction in which
enforcement may be sought, and that the unenforceability (or the modification to
conform to such laws or policies) of any provisions hereof shall not render
unenforceable, or impair, the remainder of the provisions hereof. Accordingly,
if, at the time of enforcement of any provision hereof, a court of competent
jurisdiction holds that the restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum period,
scope or geographic area reasonable under such circumstances will be substituted
for the stated period, scope or geographical area and that such court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and geographical area permitted by law.
9. AMENDMENT.
The Employment Agreement may be amended only by a written
instrument signed by the parties hereto.
10. FULL SETTLEMENT.
The Company's obligation to pay the Employee the amounts
required by the Employment Agreement shall be absolute and unconditional and
shall not be affected by any circumstances, including, without limitation, any
setoff, counterclaim, recoupment, defense or other right which the Company may
have against the Employee or anyone else. All payments and benefits to which the
Employee is entitled under the Employment Agreement shall be made and provided
without offset, deduction, or mitigation on account of income that the Employee
may receive from employment from the Company or otherwise.
11. OTHER SEVERANCE BENEFITS.
In consideration for the payments to be made to the Employee
under the Employment Agreement, the Employee agrees to waive any and all rights
to any payments or benefits under any other severance plan, program or
arrangement of the Companies.
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12. GOVERNING LAW; JURISDICTION AND SERVICE OF PROCESS.
The Employment Agreement shall be governed by the laws of the
State of Florida applicable to contracts executed in and to be performed in that
State.
13. AUTHORITY TO ENTER INTO EMPLOYMENT AGREEMENT.
The Employee represents and warrants that he is not subject to
any employment agreements, non-competition agreements or any other agreement or
understanding, whether or not in writing, that would prevent him from entering
into the Employment Agreement and performing the duties hereunder.
14. PARTIAL INVALIDITY.
The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision.
15. WITHHOLDING.
The payment of any amount pursuant to the Employment Agreement
shall be subject to applicable withholding and payroll taxes, and such other
deductions as may be required under the Company's employee benefit plans, if
any.
16. COUNTERPARTS.
The Employment Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instruments.
17. ENTIRE AGREEMENT.
All prior negotiations and agreements between the parties
hereto with respect to the matters contained herein are superseded by the
Employment Agreement, and there are no representations, warranties,
understandings or agreements other than those expressly set forth herein.
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IN WITNESS WHEREOF, the Employee and the Employer have entered
into this Employment Agreement as of the date set forth above.
EMPLOYEE
/s/ XXXXXXX X. XXXXXX
----------------------------------------
By: Xxxxxxx X. Xxxxxx
DYCOM INDUSTRIES, INC.,
a Florida corporation
By: /s/ XXXXXX XXXXXXX
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
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