Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective January 6, 2021, Dycom Industries, Inc. (the "Company") appointed
Daniel S. Peyovich as the Company's Executive Vice President of Operations. Mr.
Peyovich's appointment is made in connection with the previously announced
planned retirement of Timothy R. Estes as the Company's Executive Vice President
and Chief Operating Officer as a result of having met the mandatory retirement
age pursuant to the Company's By-laws. As required under the Company's By-Laws,
Mr. Estes is expected to retire as the Company's Executive Vice President and
Chief Operating Officer on the date of the Company's Annual Meeting of
Shareholders, which is currently anticipated to be in May 2021 (the "2021
Shareholder Meeting"). Mr. Peyovich will succeed Mr. Estes as the Company's
Chief Operating Officer following the 2021 Shareholder Meeting.
Prior to joining the Company, Mr. Peyovich, 45, was employed as President of the
Northwest Division for Balfour Beatty Construction, a leading international
infrastructure group engaged in the development, building and maintenance of
complex infrastructure such as transportation, power and utility systems and
commercial buildings. Mr. Peyovich holds a Bachelor's degree in construction
management from the University of Washington.
On January 6, 2021, the Company entered into an employment agreement with Mr.
Peyovich (the "Employment Agreement") whereby Mr. Peyovich will serve as
Executive Vice President of Operations of the Company until the planned
retirement of Timothy R. Estes. The Employment Agreement provides that Mr.
Peyovich will become the Company's Executive Vice President and Chief Operating
Officer on the date of the 2021 Shareholder Meeting. The Employment Agreement
has an initial term of three years, with automatic one-year extensions
thereafter, unless notice of non-renewal is given by either party; provided that
if there is a "change in control" of the Company at any time, including after a
non-renewal notice, the term of the Employment Agreement automatically will be
for two years from the date of the change in control.
The Employment Agreement provides for make-whole awards to Mr. Peyovich to
replace existing cash and equity awards resulting from his former employment.
The cash make-whole award is $900,000, with one-half of this amount being
payable on the next regularly scheduled payroll date after January 6, 2021, and
the remaining portion payable on the next regularly scheduled Company payroll
date following the six-month anniversary of the Employment Agreement, subject to
Mr. Peyovich's continued employment on such date (the "Cash Make-Whole Award").
The equity make-whole award provides for Mr. Peyovich to receive a grant of
time-based restricted stock units with an aggregate grant date fair value equal
to $1,200,000, 25% of which will vest annually on each of the first four
anniversaries of the grant date, subject to Mr. Peyovich's continued employment
on the applicable vesting dates (the "Equity Make-Whole Award"). Pursuant to the
terms of the Employment Agreement, Mr. Peyovich will be reimbursed by the
Company for certain expenses that he incurs in connection with his relocation to
the Palm Beach Gardens, Florida area (the "Moving Expenses"). To the extent that
reimbursement of the Moving Expenses is taxable as ordinary income to Mr.
Peyovich, the Company will also reimburse his tax obligations arising out of
such reimbursements. Mr. Peyovich will be required to repay the Moving Expenses,
together with any amount reimbursed by the Company for his tax obligations in
connection with the Moving Expenses, if his employment is terminated by the
Company for cause, or if he resigns for any reason, prior to the first
anniversary of the EmploymentAgreement.
During the term of the Employment Agreement, the Company will provide Mr.
Peyovich with the following compensation and benefits: (i) an annual base salary
of $625,000 (subject to increase by the Compensation Committee of the Board of
Directors upon review in May 2021); (ii) an annual bonus in an amount determined
in the sole discretion of the Company, with a target bonus opportunity of 80% of
his base salary; (iii) eligibility to participate in long-term incentive plans
of the Company, with a potential target award opportunity of 140% of his base
salary; (iv) eligibility to participate in all employee benefit plans or
programs of the Company and (v) expense reimbursement for out of pocket expenses
as he may incur from time to time for and on behalf of the furtherance of the
Company's business.
In the event that the Company terminates Mr. Peyovich's employment without cause
and prior to a change in control of the Company, Mr. Peyovich will be entitled
to a cash severance payment equal to two times the sum of: (x) his then annual
base salary, plus (y) the greater of (i) the average amount of the annual bonus
paid to him during the three fiscal years immediately preceding such termination
or resignation or (ii) the target annual bonus for the fiscal year of his
separation from service (the "Without Cause Severance Benefits"). If such a
termination without cause occurs prior to payment of the second half of the Cash
Make-Whole Award, Mr. Peyovich would also be entitled to that remaining unpaid
installment. These Without Cause Severance Benefits will be payable in
substantially equal monthly installments over the 24-month period following such
termination. Mr. Peyovich will continue to be eligible to participate in the
Company's health and welfare plans for a period of two years following his
termination of employment by the Company without cause (or a cash payment in
lieu of if participation is not permitted), with such participation becoming
secondary if Mr. Peyovich is eligible to participate in the employee benefit
plans of a new employer. Any unvested portion of the Equity Make-Whole Award
will vest in full, and be promptly settled, in the event of a termination of the
Mr. Peyovich's employment by the Company without cause or upon a resignation by
Mr. Peyovich for good reason under certain circumstances that do not involve a
change in control of the Company. If the Company terminates Mr. Peyovich's
employment for cause, he will not be entitled to any severance payments other
than accrued and vested benefits as required by law.
If a change in control of the Company should occur and the Company terminates
Mr. Peyovich's employment without cause or Mr. Peyovich resigns his employment
for good reason, Mr. Peyovich will be entitled to the (1) Without Cause
Severance Benefits, (2) any remaining unpaid portion of the Cash Make-Whole
Award and (3) a pro rata annual bonus for the year in which such termination or
resignation occurs equal to the greater of (i) the average amount of the annual
bonus paid to him during the three fiscal years immediately preceding such
termination or resignation or (ii) the target annual bonus for the fiscal year
of his separation from service, multiplied by a fraction equal to the number of
days employed during the year divided by 365. These amounts will be payable in a
single lump sum within five days following such termination or resignation. Mr.
Peyovich also will continue to participate in the Company's health and welfare
plans for a period of two years following his termination or resignation (or
receive a cash payment in lieu of participation if participation is not
permitted), with such participation becoming secondary if Mr. Peyovich is
eligible to participate in the employee benefit plans of a new employer. In
addition, all outstanding equity awards held by Mr. Peyovich at the time of his
resignation of employment with the Company for good reason or his termination of
employment by the Company without cause on or following a change in control will
fully and immediately vest with performance-based awards vesting at target.
If any severance payment or other payments due to Mr. Peyovich would be subject
to the excise tax imposed by Section 4999 of the Internal Revenue Code, Mr.
Peyovich will receive either (i) the full amount of the payments or (ii) the
greatest amount of the payments such that no portion is subject to the excise
tax (taking into account Mr. Peyovich's payment of any excise tax), whichever
results in a greater after-tax benefit to him.
Payment of severance under the Employment Agreement is contingent upon Mr.
Peyovich's execution and delivery of a general waiver and release of claims
against the Company. Mr. Peyovich is subject to a five-year confidentiality
covenant and non-competition and non-solicitation covenants that apply for
one-year following his separation from service. Mr. Peyovich is also subject to
an assignment of inventions and developments agreement. The Employment Agreement
also provides for arbitration in the event of any dispute or controversy arising
out of the Employment Agreement or Mr. Peyovich's employment with the Company.
The above summary of the Employment Agreement does not purport to be complete
and is qualified in its entirety by reference to the Employment Agreement, a
copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and
incorporated into this Item 5.02 by reference.
Mr. Peyovich does not have any family relationship with any of the Company's
executive officers or directors and is not a party to any transaction with the
Company that would be required to be disclosed pursuant to
Item 404(a) of Regulation S-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
10.1 Employment Agreement by and between Dycom Industries, Inc. and Daniel
S. Peyovich, dated as of January 6, 2021.
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded
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