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SEPARATION AGREEMENT
THIS
AGREEMENT, dated as of April 3, 2008 (the “
Agreement ”), by and between DYCOM
INDUSTRIES, INC., a Florida corporation (the “
Company ”), and RICHARD L. DUNN (the
“ Executive ”).
WHEREAS,
the Company and the Executive are parties to a certain Employment
Agreement, dated January 28, 2000, as amended from time to
time, (the “ Employment Agreement
”); and
WHEREAS,
the Executive and the Company desire to settle fully and finally
any and all employment relationship matters between them including,
but not limited to, any issues that might have arisen out of the
Executive’s employment with the Company and the termination
thereof;
NOW,
THEREFORE, in consideration of the covenants and agreements
hereinafter set forth in this Agreement, the parties hereto hereby
agree as follows:
1.
Separation Date . The Executive’s employment with the
Company shall terminate effective as of the close of business on
April 4, 2008 (the “ Separation
Date ”). The Company and the Executive agree
that, effective as of the Separation Date, the Executive shall
cease to be an employee of the Company and will have no offices,
positions and capacities with the Company or any of its
subsidiaries, affiliates or predecessors (collectively, the
“ Company Group ”) and the
Executive shall take such actions as may be requested by the
Company to terminate such offices and positions. The Separation
Date shall be considered the date on which the Employee
“separates from service” for purposes of
Section 409A of the Internal Revenue Code of 1986, as amended,
and the regulations and guidance promulgated thereunder (“
Section 409A ”).
2.
Payments and Benefits . Subject to the provisions of
paragraph 16 of this Agreement and in consideration for the
Executive’s obligations under this Agreement, including under
paragraph 5 hereof:
(a)
Termination Payments and Benefits . In connection with the
Executive’s separation from service, the Company shall pay
and provide the Executive with the payments and benefits (the
“ Termination Payments and Benefits
”) described in this paragraph 2(a), provided that the
Executive does not revoke this Agreement during the Revocation
Period (as defined in paragraph 6). The Termination Payments and
Benefits shall consist of the following:
(i) The
Company shall pay the Executive his base salary (at the annualized
rate of $325,000) (the “ Salary Amount
”) in accordance with the Company’s regular payroll
practices for the fifty-two (52) week period beginning with
the first payroll period ending after the expiration of the
Revocation Period (the “ Severance
Period ”). Notwithstanding the preceding
sentence, in the event of the Executive’s death, any portion
of the Salary Amount that has not been paid shall be paid on the
fifteenth business day following the Company’s receipt of
notice of the Executive’s death.
(ii) The
Company shall provide the Executive with all forms necessary for
him to make any distribution election available to him under the
Company 401(k) Plan (the “ 4
01(k) Plan ”).
(iii) The
Executive shall be eligible to continue his coverage under the
Company group medical plan pursuant to COBRA. The Company shall
reimburse the Executive for his monthly COBRA premiums to the
extent of the Company’s contribution to the group medical
plan premiums for then current employees for the period commencing
on the Separation Date and ending on the earlier of (x) the
18 month anniversary of the Separation Date and (y) the
date on which the Executive becomes eligible for medical coverage
as the result of the Executive accepting employment with a new
employer. For the period commencing on the 18 month
anniversary of the Separation Date and ending on the earlier of
(A) June 30, 2011 and (B) the date on which the
Executive becomes eligible for medical coverage (or was eligible at
any time) as the result of the Executive accepting employment with
a new employer, the Company shall provide the Executive with the
group medical plan coverage then provided by the Company to its
employees generally and the Executive shall pay to the Company
monthly premiums for such medical coverage in an amount equal to
the monthly premium paid by then current employees. The Executive
agrees to give the Company written notice within 10 business days
following the date he becomes eligible for medical coverage with a
new employer.
(iv) The
Company shall continue to provide the Executive with life insurance
coverage under the Company’s group life insurance program
(and shall pay all premiums in connection therewith (the “
Life Insurance Premiums ”)) until the
earlier of (x) the expiration of the Severance Period and
(y) the date on which the Executive becomes eligible for life
insurance coverage as the result of the Executive accepting
employment with a new employer.
(v) All
outstanding stock options held by the Executive shall remain
exercisable until the earlier of (x) the third anniversary of
the Separation Date and (y) the expiration date of the term of
such stock option (the “ Expiration Date
”). Any stock options that remain unexercised as of the
Expiration Date shall be cancelled without any payment.
(vi) 7,417
of the time vested restricted shares and time vested restricted
share units granted to the Executive pursuant to the
Company’s Long-Term Incentive Plan that are unvested as of
the Separation Date shall be fully vested and paid out to the
Executive within sixty (60) days of the Separation Date. All
remaining time vested restricted shares and time vested restricted
share units held by the Executive that are unvested as of
Separation Date shall be forfeited and cancelled without
payment.
(vii) 9,721
of the performance vested restricted share units granted to the
Executive pursuant to the Company’s Long-Term Incentive Plan
that are unvested as of the Separation Date shall be fully vested
and paid out to the Executive within sixty (60) days of the
Separation Date. All remaining performance-based restricted share
units and performance-based restricted shares held by the Executive
that are unvested as of Separation Date shall be forfeited and
cancelled without payment.
(viii) The
Company shall pay the Executive for all days of accrued but unused
vacation within fifteen (15) days after the expiration of the
Revocation Period.
(b)
Reimbursement of Expenses . The Executive shall be
reimbursed for all expenses incurred during the course of his
employment with the Company within fifteen (15) days of the
Separation Date, subject to the Company’s business expense
reimbursement policies.
(c)
No Other Benefits . Except as otherwise set forth herein, as
of the Separation Date, the Executive shall not be eligible to
participate in any Company benefit plan or program, including
without limitation any incentive, bonus or similar compensation
plan or arrangement. Without limiting the generality of the
preceding sentence, the Executive acknowledges and agrees that in
consideration of the payments and benefits to be provided under
this Agreement, the Executive shall not be entitled to any other
severance or similar benefits under any plan, program, policy or
arrangement, whether formal or informal, written or unwritten, of
the Company, or to any other bonus or incentive payment for the
fiscal year ending July 26, 2008 or any other period.
3.
Advisory Services .
(a)
Services . The Executive shall become an advisor to the
Company for the period commencing on the first day following the
Separation Date and ending on the earlier of (i) twelve months
following the Separation Date and (ii) thirty (30) days
after the Executive notifies the Company in writing of the
termination of such period (the “ Advisory
Period ”). During the Advisory Period, the
Executive shall provide such tax advisory or other services with
respect to the Company and its subsidiaries and affiliates at such
times (taking reasonable account of the Executive’s other
time commitments) and in such manner as may be reasonably requested
by the Chief Executive Officer or Chief Financial Officer of the
Company; provided that the Executive shall not be required
to provide more than 25 hours of tax advisory or other services
during any month of the Advisory Period. The Executive is not and
shall not be deemed to be an employee of the Company by virtue of
his retention as an advisor hereunder or the performance of
advisory services to the Company, and the Executive shall, for all
purposes, be deemed an independent contractor.
(b)
Fees . In consideration for the tax advisory or other
services provided during the Advisory Period, the Company shall pay
the Executive $200 per hour (the “ Fees
”). The Executive agrees to submit a monthly time sheet to
the Company setting forth in reasonable detail the hours that he
worked in the previous month and the services provided. Subject to
the Executive’s submission of the monthly time sheet, such
payments shall be made as soon as practicable following the end of
the month to which the payment relates, but not later than fifteen
(15) days following the end of such month. The Executive shall
obtain the Company’s approval, in advance, prior to incurring
any business expenses subject to reimbursement pursuant to the
Company’s business expense policies. The Company shall not
withhold or pay any federal, state nor local income tax of any kind
with respect to any Fees. The Executive agrees that he is
responsible for remitting and paying all taxes and income
withholding taxes as required with respect to the Fees.
4.
Covenants .
(a)
Covenant Provisions . The Executive shall continue to be
subject to the provisions of paragraph 4 of the Employment
Agreement (the “ Covenant Provisions
”), and the Covenant Provision
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