Dycom Industries, Inc. Adopts New Shareholder Rights Plan

Apr 04, 2001, 01:00 ET from Dycom Industries, Inc.

    PALM BEACH GARDENS, Fla., April 4 /PRNewswire/ -- Dycom Industries, Inc.
 (NYSE:   DY) announced today that its board of directors has adopted a new
 shareholder rights plan to replace its existing shareholder rights plan and,
 pursuant to the terms of the existing rights plan, declared the rights
 currently outstanding null and void as of the close of business on April 14,
 2001.  The existing rights plan, which was scheduled to expire on June 1,
 2002, had become outdated and no longer afforded Dycom shareholders the
 intended protections against partial tender offers and other coercive, unfair
 or abusive takeover tactics that might be used in an attempt to gain control
 of Dycom without paying all shareholders a fair price for their shares.  While
 the newly adopted rights plan provides the intended protections, it will not
 prevent all takeovers since it is designed to deter coercive takeover tactics
 and to encourage anyone attempting to acquire Dycom to first negotiate with
 the Dycom board of directors.
     Under the newly adopted rights plan, one preferred stock purchase right
 will be distributed as a dividend on each share of Dycom common stock
 outstanding as of the close of business on April 14, 2001.  Each right will
 entitle Dycom shareholders to buy one ten-thousandth of a share of Series A
 Preferred Stock of Dycom at an exercise price of $95.  The rights become
 exercisable only if a person or group acquires beneficial ownership of 15% or
 more of Dycom's outstanding common stock or commences a tender or exchange
 offer which would result in a person or group beneficially owning 15% or more
 of Dycom's outstanding common stock.
     If any person becomes the beneficial owner of 15% or more of Dycom's
 common stock or a holder of 15% or more of Dycom's common stock engages in
 certain self-dealing transactions or a merger transaction in which Dycom is
 the surviving corporation and its common stock remains outstanding, then each
 right not owned by such person or certain related parties will entitle its
 holder to purchase, at the right's then-current exercise price, units of the
 Dycom's Series A Preferred Stock (or, in certain circumstances, Dycom common
 stock, cash, property or other securities of Dycom) having a market value
 equal to twice the then-current exercise price.  In addition, if Dycom is
 involved in a merger or other business combination transaction with another
 person after which its common stock does not remain outstanding, or sells 50%
 or more of its assets or earning power to another person, each right will
 entitle its holder to purchase, at the right's then-current exercise price,
 shares of common stock of the ultimate parent of such other person having a
 market value equal to twice the then-current exercise price.
     Dycom will generally be entitled to redeem the rights at $0.01 per right
 at any time until the tenth business day following public announcement that a
 person or group has acquired 15% or more of its outstanding common stock.
     A copy of the newly adopted rights plan is attached as an exhibit to the
 Current Report on Form 8-K filed by Dycom with the Securities and Exchange
 Commission on April 4, 2001.  Also, certain provisions of the newly adopted
 rights plan are outlined in the letter below which is being mailed to all
 shareholders.
 
     April 4, 2001
 
     To Our Shareholders:
 
     I am pleased to inform you that, earlier today, our board of directors
 adopted a new shareholder rights plan that replaces our existing shareholder
 rights plan.  The existing rights plan, which was scheduled to expire on June
 1, 2002, had become outdated and no longer afforded our shareholders the
 intended protections against partial tender offers and other coercive, unfair
 or abusive takeover tactics that might be used in an attempt to gain control
 of Dycom without paying all of our shareholders a fair price for their shares.
 Our new rights plan provides the intended protections.  Concurrently with the
 adoption of the new rights plan, pursuant to the terms of the existing rights
 plan, our board of directors declared the rights currently outstanding null
 and void as of the close of business on April 14, 2001.
     Many other major corporations have adopted rights plans similar to our new
 rights plan.  We consider the new rights plan to be extremely valuable in
 protecting the equity investment of our shareholders in Dycom and our
 shareholders' ability to realize the full value of that investment while not
 foreclosing a fair acquisition offer for Dycom.  The new rights plan, together
 with certain charter and by-law provisions and certain provisions of the
 Florida Business Corporations Act, is designed to safeguard all of our
 shareholders from abusive takeover tactics that may be used by certain bidders
 and that our board of directors believes are not in the best interests of our
 shareholders.  Such tactics may unfairly pressure our shareholders, squeeze
 out their investment without giving them any real choice and deprive them of
 the full value of their shares.
     Our new rights plan is not intended to, and will not, prevent a takeover
 of Dycom.  Designed to deal with the very serious problem of unilateral
 actions by hostile acquirors which are calculated to deprive our board of
 directors and our shareholders of their ability to determine Dycom's destiny,
 the existence of the new rights plan should not affect any prospective offeror
 willing to acquire Dycom and to negotiate with the board.  The rights issued
 under the new rights plan may generally be redeemed by Dycom up to the tenth
 business day after any person or group has acquired 15% or more of Dycom's
 common stock, and is not intended to and should not interfere with any merger
 or other business combination approved by our board of directors.  Our board
 of directors did not adopt the new rights plan in response to any party's
 attempt to acquire Dycom and our board of directors is not aware of any such
 effort.  Rather, the new rights plan will aid our board of directors in
 continuing to protect the interests of all of our shareholders.
     The issuance of rights under the new rights plan does not in any way
 weaken the financial strength of Dycom or interfere with our business plan.
 As with the issuance of rights under the existing rights plan, the issuance of
 the rights under our new rights plan will have no dilutive effect, will not
 affect reported earnings per share, will not be taxable to Dycom or to our
 shareholders, and will not change the way in which our shareholders can trade
 Dycom's shares.  We have enclosed a "Summary of Rights to Purchase Preferred
 Stock" which provides certain information about the new rights plan and which
 we urge you to read carefully.  As explained in the Summary of Rights to
 Purchase Preferred Stock, the rights will only be exercisable if and when an
 event arises which triggers their effectiveness.  They will then operate to
 protect our shareholders from being deprived of their right to share in the
 full measure of Dycom's long-term potential.
     Our board of directors believes the new rights plan will continue to serve
 an important role in protecting the value of your Dycom shares.
     Sincerely,
     Steven Nielsen, President and CEO
 
 

SOURCE Dycom Industries, Inc.
    PALM BEACH GARDENS, Fla., April 4 /PRNewswire/ -- Dycom Industries, Inc.
 (NYSE:   DY) announced today that its board of directors has adopted a new
 shareholder rights plan to replace its existing shareholder rights plan and,
 pursuant to the terms of the existing rights plan, declared the rights
 currently outstanding null and void as of the close of business on April 14,
 2001.  The existing rights plan, which was scheduled to expire on June 1,
 2002, had become outdated and no longer afforded Dycom shareholders the
 intended protections against partial tender offers and other coercive, unfair
 or abusive takeover tactics that might be used in an attempt to gain control
 of Dycom without paying all shareholders a fair price for their shares.  While
 the newly adopted rights plan provides the intended protections, it will not
 prevent all takeovers since it is designed to deter coercive takeover tactics
 and to encourage anyone attempting to acquire Dycom to first negotiate with
 the Dycom board of directors.
     Under the newly adopted rights plan, one preferred stock purchase right
 will be distributed as a dividend on each share of Dycom common stock
 outstanding as of the close of business on April 14, 2001.  Each right will
 entitle Dycom shareholders to buy one ten-thousandth of a share of Series A
 Preferred Stock of Dycom at an exercise price of $95.  The rights become
 exercisable only if a person or group acquires beneficial ownership of 15% or
 more of Dycom's outstanding common stock or commences a tender or exchange
 offer which would result in a person or group beneficially owning 15% or more
 of Dycom's outstanding common stock.
     If any person becomes the beneficial owner of 15% or more of Dycom's
 common stock or a holder of 15% or more of Dycom's common stock engages in
 certain self-dealing transactions or a merger transaction in which Dycom is
 the surviving corporation and its common stock remains outstanding, then each
 right not owned by such person or certain related parties will entitle its
 holder to purchase, at the right's then-current exercise price, units of the
 Dycom's Series A Preferred Stock (or, in certain circumstances, Dycom common
 stock, cash, property or other securities of Dycom) having a market value
 equal to twice the then-current exercise price.  In addition, if Dycom is
 involved in a merger or other business combination transaction with another
 person after which its common stock does not remain outstanding, or sells 50%
 or more of its assets or earning power to another person, each right will
 entitle its holder to purchase, at the right's then-current exercise price,
 shares of common stock of the ultimate parent of such other person having a
 market value equal to twice the then-current exercise price.
     Dycom will generally be entitled to redeem the rights at $0.01 per right
 at any time until the tenth business day following public announcement that a
 person or group has acquired 15% or more of its outstanding common stock.
     A copy of the newly adopted rights plan is attached as an exhibit to the
 Current Report on Form 8-K filed by Dycom with the Securities and Exchange
 Commission on April 4, 2001.  Also, certain provisions of the newly adopted
 rights plan are outlined in the letter below which is being mailed to all
 shareholders.
 
     April 4, 2001
 
     To Our Shareholders:
 
     I am pleased to inform you that, earlier today, our board of directors
 adopted a new shareholder rights plan that replaces our existing shareholder
 rights plan.  The existing rights plan, which was scheduled to expire on June
 1, 2002, had become outdated and no longer afforded our shareholders the
 intended protections against partial tender offers and other coercive, unfair
 or abusive takeover tactics that might be used in an attempt to gain control
 of Dycom without paying all of our shareholders a fair price for their shares.
 Our new rights plan provides the intended protections.  Concurrently with the
 adoption of the new rights plan, pursuant to the terms of the existing rights
 plan, our board of directors declared the rights currently outstanding null
 and void as of the close of business on April 14, 2001.
     Many other major corporations have adopted rights plans similar to our new
 rights plan.  We consider the new rights plan to be extremely valuable in
 protecting the equity investment of our shareholders in Dycom and our
 shareholders' ability to realize the full value of that investment while not
 foreclosing a fair acquisition offer for Dycom.  The new rights plan, together
 with certain charter and by-law provisions and certain provisions of the
 Florida Business Corporations Act, is designed to safeguard all of our
 shareholders from abusive takeover tactics that may be used by certain bidders
 and that our board of directors believes are not in the best interests of our
 shareholders.  Such tactics may unfairly pressure our shareholders, squeeze
 out their investment without giving them any real choice and deprive them of
 the full value of their shares.
     Our new rights plan is not intended to, and will not, prevent a takeover
 of Dycom.  Designed to deal with the very serious problem of unilateral
 actions by hostile acquirors which are calculated to deprive our board of
 directors and our shareholders of their ability to determine Dycom's destiny,
 the existence of the new rights plan should not affect any prospective offeror
 willing to acquire Dycom and to negotiate with the board.  The rights issued
 under the new rights plan may generally be redeemed by Dycom up to the tenth
 business day after any person or group has acquired 15% or more of Dycom's
 common stock, and is not intended to and should not interfere with any merger
 or other business combination approved by our board of directors.  Our board
 of directors did not adopt the new rights plan in response to any party's
 attempt to acquire Dycom and our board of directors is not aware of any such
 effort.  Rather, the new rights plan will aid our board of directors in
 continuing to protect the interests of all of our shareholders.
     The issuance of rights under the new rights plan does not in any way
 weaken the financial strength of Dycom or interfere with our business plan.
 As with the issuance of rights under the existing rights plan, the issuance of
 the rights under our new rights plan will have no dilutive effect, will not
 affect reported earnings per share, will not be taxable to Dycom or to our
 shareholders, and will not change the way in which our shareholders can trade
 Dycom's shares.  We have enclosed a "Summary of Rights to Purchase Preferred
 Stock" which provides certain information about the new rights plan and which
 we urge you to read carefully.  As explained in the Summary of Rights to
 Purchase Preferred Stock, the rights will only be exercisable if and when an
 event arises which triggers their effectiveness.  They will then operate to
 protect our shareholders from being deprived of their right to share in the
 full measure of Dycom's long-term potential.
     Our board of directors believes the new rights plan will continue to serve
 an important role in protecting the value of your Dycom shares.
     Sincerely,
     Steven Nielsen, President and CEO
 
 SOURCE  Dycom Industries, Inc.