Exhibit 10.1
EMPLOYMENT AGREEMENT made as of the 15th day of September, 2005 by and
between ARROW ELECTRONICS, INC., a New York corporation with its principal
office at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Company"), and
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, residing at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ (the "Executive").
WHEREAS, the Company wishes to employ the Executive as Senior Vice
President and Chief Supply Chain Officer, with the responsibilities and duties
of an officer of the Company; and
WHEREAS, the Executive wishes to accept such employment and to render
services to the Company on the terms set forth in, and in accordance with the
provisions of, this Employment Agreement (the "Agreement");
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties agree as follows:
1. Employment and Duties.
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a) Employment. The Company hereby employs the Executive as Senior Vice
President and Chief Supply Chain Officer for the Employment Period defined in
Paragraph 3, to hold the office of Senior Vice President and Chief Supply Chain
Officer and to perform such other duties for the Company, its subsidiaries and
affiliates as may be specified from time to time by the Company's Board of
Directors, subject to the following provisions of this Agreement. The Executive
hereby accepts such employment.
b) Duties and Responsibilities. It is contemplated that the Executive
will be Senior Vice President of the Company and Chief Supply Chain Officer, but
the Board of Directors shall have the right to adjust the duties,
responsibilities, and title of the Executive as the Board of Directors may from
time to time deem to be in the interests of the Company, provided, however, that
during the Employment Period, without the consent of the Executive, he shall not
be assigned any titles, duties or responsibilities which, in the aggregate,
represent a material diminution in, or are materially inconsistent with, his
prior title, duties, and responsibilities as Senior Vice President and Chief
Supply Chain Officer. The Executive will report directly to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
President and Chief Executive Officer of the Company or his successor in that
role.
If the Board of Directors does not either continue the Executive in
the office of Senior Vice President and Chief Supply Chain Officer or elect him
to some other executive office satisfactory to the Executive, the Executive
shall have the right to decline to give further service to the Company and shall
have the rights and obligations which would accrue to him under Paragraph 6 if
he were discharged without cause. If the Executive decides to exercise such
right to decline to give further service, he shall within forty-five days after
such action or omission by the Board of Directors give written notice to the
Company stating his objection and the action he thinks necessary to correct it,
and he shall permit the Company to have a forty-five day period in which to
correct its action or omission. If the Company makes a correction satisfactory
to the Executive, the Executive shall be obligated to continue to serve the
Company. If the Company does not make such a correction, the Executive's rights
and obligations under Paragraph 6 shall accrue at the expiration of such
forty-five day period.
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c) Time Devoted to Duties. The Executive shall devote all of his
normal business time and efforts to the business of the Company, its
subsidiaries and its affiliates, the amount of such time to be sufficient, in
the reasonable judgment of the Board of Directors, to permit him diligently and
faithfully to serve and endeavor to further their interests to the best of his
ability.
2. Compensation.
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a) Monetary Remuneration and Benefits. During the Employment Period,
the Company shall pay to the Executive for all services rendered by him in any
capacity:
i. a minimum base salary of $395,000 per year (payable in
accordance with the Company's then prevailing practices, but in no
event less frequently than in equal monthly installments), subject to
increase if the Board of Directors of the Company in its sole
discretion so determines; provided that, should the company institute
a company-wide pay cut/furlough program, such salary may be decreased
by up to 15%, but only for as long as said company-wide program is in
effect;
ii. such additional compensation by way of salary or bonus or
fringe benefits as the Board of Directors of the Company in its sole
discretion shall authorize or agree to pay, payable on such terms and
conditions as it shall determine; and
iii. such employee benefits that are made available by the
Company to its other executives generally.
b) Annual Incentive Payment. The Executive shall participate in the
Company's Management Incentive Plan (or such alternative, successor, or
replacement plan or program in which the Company's principal operating
executives, other than the Chief Executive Officer, generally participate) and
shall have a targeted incentive thereunder of not less than $237,000 per annum;
provided, however, that the Executive's actual incentive payment in any year
shall be measured by the Company's performance against goals established for
that year and that such performance may produce an incentive payment ranging
from none to twice the targeted amount. The Executive's incentive payment for
any year will be appropriately pro-rated to reflect a partial year of
employment.
c) Supplemental Executive Retirement Plan. The Executive shall
participate in the Company's Unfunded Pension Plan for Selected Executives (the
"SERP").
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d) Automobile. During the Employment Period, the Company will pay the
Executive a monthly automobile allowance of $850.
e) Expenses. During the Employment Period, the Company agrees to
reimburse the Executive, upon the submission of appropriate vouchers, for
out-of-pocket expenses (including, without limitation, expenses for travel,
lodging and entertainment) incurred by the Executive in the course of his duties
hereunder.
f) Office and Staff. The Company will provide the Executive with an
office, secretary and such other facilities as may be reasonably required for
the proper discharge of his duties hereunder.
g) Indemnification. The Company agrees to indemnify, defend and hold
the Executive harmless for any and all liabilities to which he may be subject as
a result of his employment hereunder (and as a result of his service as an
officer or director of the Company, or as an officer or director of any of its
U.S. or foreign subsidiaries or affiliates), as well as the costs of any legal
action brought or threatened against him as a result of such employment, to the
fullest extent permitted by law. The Company shall at all times during the
Employment Period maintain directors and officers liability insurance covering
directors and officers of the Company and its U.S. and foreign subsidiaries and
affiliates in amounts and under limitations and with terms and conditions as
determined by the Company's management and the Board of Directors.
h) Participation in Plans. Notwithstanding any other provision of this
Agreement, the Executive shall have the right to participate in any and all of
the plans or programs made available by the Company (or it subsidiaries,
divisions or affiliates) to, or for the benefit of, executives (including the
annual stock option and performance share programs) or employees in general, on
a basis consistent with other senior executives.
3. The Employment Period.
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The "Employment Period," as used in the Agreement, shall mean the
period beginning as of the date hereof and terminating on the last day of the
calendar month in which the first of the following occurs:
a) the death of the Executive;
b) the disability of the Executive as determined in accordance with
Paragraph 4 hereof and subject to the provisions thereof;
c) the termination of the Executive's employment by the Company for
cause in accordance with Paragraph 5 hereof; or
d) September 14, 2007; provided, however, that, unless sooner
terminated as otherwise provided herein, the Employment Period shall
automatically be extended for one or more twelve (12) month periods beyond the
then scheduled expiration date thereof unless between the 18th and 12th month
preceding such scheduled expiration date either the Company or the Executive
gives the other written notice of its or his election not to have the Employment
Period so extended.
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4. Disability.
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For purposes of this Agreement, the Executive will be deemed
"disabled" upon the earlier to occur of (i) his becoming disabled as defined
under the terms of the disability benefit program applicable to the Executive,
if any, and (ii) his absence from his duties hereunder on a full-time basis for
one hundred eighty (180) consecutive days as a result of his incapacity due to
accident or physical or mental illness. If the Executive becomes disabled (as
defined in the preceding sentence), the Employment Period shall terminate on the
last day of the month in which such disability is determined. Until such
termination of the Employment Period, the Company shall continue to pay to the
Executive his base salary, any additional compensation authorized by the
Company's Board of Directors, and other remuneration and benefits provided in
accordance with Paragraph 2 hereof, all without delay, diminution or proration
of any kind whatsoever (except that his remuneration hereunder shall be reduced
by the amount of any payments he may otherwise receive as a result of his
disability pursuant to a disability program provided by or through the Company),
and his medical benefits and life insurance shall remain in full force. After
termination of the Employment Period as a result of the disability of the
Executive, the medical benefits covering the Executive and his family shall
remain in place (subject to the eligibility requirements and other conditions
continued in the underlying plan, as described in the Company's employee
benefits manual, and subject to the requirement that the Executive continue to
pay the "employee portion" of the cost thereof), and the Executive's life
insurance policy under the Management Insurance Program shall be transferred to
him, as provided in the related agreement, subject to the obligation of the
Executive to pay the premiums therefor.
In the event that, notwithstanding such a determination of disability,
the Executive is determined not to be totally and permanently disabled prior to
the then scheduled expiration of the Employment Period, the Executive shall be
entitled to resume employment with the Company under the terms of this Agreement
for the then remaining balance of the Employment Period.
5. Termination for Cause.
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In the event of any malfeasance, willful misconduct, active fraud or
gross negligence by the Executive in connection with his employment hereunder,
the Company shall have the right to terminate the Employment Period by giving
the Executive notice in writing of the reason for such proposed termination. If
the Executive shall not have corrected such conduct to the satisfaction of the
Company within sixty days after such notice, the Employment Period shall
terminate and the Company shall have no further obligation to the Executive
hereunder but the restriction on the Executive's activities contained in
Paragraph 7 and the obligations of the Executive contained in Paragraphs 8(b)
and 8(c) shall continue in effect as provided therein.
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6. Termination Without Cause.
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In the event that the Company discharges the Executive without cause,
the Executive shall be entitled to be paid the salary provided in Paragraph
2(a), and two-thirds of the targeted incentive provided in Paragraph 2(b),
during the 24 month period following such discharge, provided that, such
payments shall cease upon the Executive's death. In addition, any restricted
stock awards, performance shares and stock options, which would have vested,
been earned or become exercisable during such 24 month period shall immediately
vest, become earned and become exercisable, provided that, in the case of
performance shares, no shares shall be payable to the Executive until the
settlement date for such performance shares. The Executive shall also continue
to be entitled to his rights under Paragraph 4 during such 24 month period. Any
amounts payable to the Executive under this Paragraph 6 shall be reduced by the
amount of the Executive's earnings from other employment (which the Executive
shall have an affirmative duty to seek; provided, however, that the Executive
shall not be obligated to accept a new position which is not reasonably
comparable to his employment with the Company).
7. Non-Competition; Trade Secrets.
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During the Employment Period and for a period of one year after the
termination of the Employment Period, the Executive will not, directly or
indirectly:
a) Disclosure of Information. Use, attempt to use, disclose or
otherwise make known to any person or entity (other than to the Board of
Directors of the Company or otherwise in the course of the business of the
Company, its subsidiaries or affiliates and except as may be required by
applicable law):
i. any knowledge or information, including, without limitation,
lists of customers or suppliers, trade secrets, know-how, inventions,
discoveries, processes and formulae, as well as all data and records
pertaining thereto, which he may acquire in the course of his
employment, in any manner which may be detrimental to or cause injury
or loss to the Company, its subsidiaries or affiliates; or
ii. any knowledge or information of a confidential nature
(including all unpublished matters) relating to, without limitation,
the business, properties, accounting, books and records, trade secrets
or memoranda of the Company, its subsidiaries or affiliates, which he
now knows or may come to know in any manner which may be detrimental
to or cause injury or loss to the Company, its subsidiaries or
affiliates.
b) Non-Competition. Engage or become interested in the United States,
Canada or Mexico (whether as an owner, shareholder, partner, lender or other
investor, director, officer, employee, consultant or otherwise) in the business
of distributing electronic parts, components, supplies or systems, or any other
business that is competitive with the principal business or businesses then
conducted by the Company, its subsidiaries or affiliates (provided, however,
that nothing contained herein shall prevent the Executive from acquiring or
owning less than 1% of the issued and outstanding capital stock or debentures of
a corporation whose securities are listed on the New York Stock Exchange,
American Stock Exchange, or the National Association of Securities Dealers
Automated Quotation System, if such investment is otherwise permitted by the
Company's Human Resource and Conflict of Interest policies);
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c) Solicitation. Solicit or participate in the solicitation of any
business of any type conducted by the Company, its subsidiaries or affiliates,
during said term or thereafter, from any person, firm or other entity which was
or at the time is a supplier or customer, or prospective supplier or customer,
of the Company, its subsidiaries or affiliates; or
d) Employment. Employ or retain, or arrange to have any other person,
firm or other entity employ or retain, or otherwise participate in the
employment or retention of, any person who was an employee or consultant of the
Company, its subsidiaries or affiliates, at any time during the period of twelve
consecutive months immediately preceding such employment or retention.
The Executive will promptly furnish in writing to the Company, its
subsidiaries or affiliates, any information reasonably requested by the Company
(including any third party confirmations) with respect to any activity or
interest the Executive may have in any business.
Except as expressly herein provided, nothing contained herein is
intended to prevent the Executive, at any time after the termination of the
Employment Period, from either (i) being gainfully employed or (ii) exercising
his skills and abilities outside of such geographic areas, provided in either
case the provisions of this Agreement are complied with.
8. Preservation of Business.
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a) General. During the Employment Period, the Executive will use his
best efforts to advance the business and organization of the Company, its
subsidiaries and affiliates, to keep available to the Company, its subsidiaries
and affiliates, the services of present and future employees and to advance the
business relations with its suppliers, distributors, customers and others.
b) Patents and Copyrights, etc. The Executive agrees, without
additional compensation, to make available to the Company all knowledge
possessed by him relating to any methods, developments, inventions, processes,
discoveries and/or improvements (whether patented, patentable or unpatentable)
("Intellectual Property") which concern in any way the business of the Company,
its subsidiaries or affiliates, whether acquired by the Executive before or
during his employment hereunder provided that, the foregoing shall not apply to
any Intellectual Property developed by Executive that on the date hereof is
owned by a third party, including without limitation all technical contributions
(disclosures, patents, and technical reports) associated with Magneto Optical
Read/Write Ferrite Head Physical Design, Read/Write Optical Media Process and
Physical Design, and High Speed Dielectric Film Deposition Process that are
owned by IBM.
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Any methods, developments, inventions, processes, discoveries and/or
improvements (whether patented, patentable or unpatentable) which the Executive
may conceive of or make, related directly or indirectly to the business or
affairs of the Company, its subsidiaries or affiliates, or any part thereof,
during the Employment Period, shall be and remain the property of the Company.
The Executive agrees promptly to communicate and disclose all such methods,
developments, inventions, processes, discoveries and/or improvements to the
Company and to execute and deliver to it any instruments deemed necessary by the
Company to effect the disclosure and assignment thereof to it. The Executive
also agrees, on request and at the expense of the Company, to execute patent
applications and any other instruments deemed necessary by the Company for the
prosecution of such patent applications or the acquisition of Letters Patent in
the United States or any other country and for the assignment to the Company of
any patents which may be issued. The Company shall indemnify and hold the
Executive harmless from any and all costs, expenses, liabilities or damages
sustained by the Executive by reason of having made such patent applications or
being granted such patents.
Any writings or other materials written or produced by the Executive
or under his supervision (whether alone or with others and whether or not during
regular business hours), during the Employment Period which are related,
directly or indirectly, to the business or affairs of the Company, its
subsidiaries or affiliates, or are capable of being used therein, and the
copyright thereof, common law or statutory, including all renewals and
extensions, shall be and remain the property of the Company. The Executive
agrees promptly to communicate and disclose all such writings or materials to
the Company and to execute and deliver to it any instruments deemed necessary by
the Company to effect the disclosure and assignment thereof to it. The Executive
further agrees, on request and at the expense of the Company, to take any and
all action deemed necessary by the Company to obtain copyrights or other
protections for such writings or other materials or to protect the Company's
right, title and interest therein. The Company shall indemnify, defend and hold
the Executive harmless from any and all costs, expenses, liabilities or damages
sustained by the Executive by reason of the Executive's compliance with the
Company's request.
c) Return of Documents. Upon the termination of the Employment Period,
including any termination of employment described in Paragraph 6, the Executive
will promptly return to the Company all copies of information protected by
Paragraph 7(a) hereof or pertaining to matters covered by subparagraph (b) of
this Paragraph 8 which are in his possession, custody or control, whether
prepared by him or others.
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9. Separability.
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The Executive agrees that the provisions of Paragraphs 7 and 8 hereof
constitute independent and separable covenants which shall survive the
termination of the Employment Period and which shall be enforceable by the
Company notwithstanding any rights or remedies the Executive may have under any
other provisions hereof. The Company agrees that the provisions of Paragraph 6
hereof constitute independent and separable covenants which shall survive the
termination of the Employment Period and which shall be enforceable by the
Executive notwithstanding any rights or remedies the Company may have under any
other provisions hereof.
10. Specific Performance.
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The Executive acknowledges that (i) the services to be rendered under
the provisions of this Agreement and the obligations of the Executive assumed
herein are of a special, unique and extraordinary character; (ii) it would be
difficult or impossible to replace such services and obligations; (iii) the
Company, its subsidiaries and affiliates will be irreparably damaged if the
provisions hereof are not specifically enforced; and (iv) the award of monetary
damages will not adequately protect the Company, its subsidiaries and affiliates
in the event of a breach hereof by the Executive. The Company acknowledges that
(i) the Executive will be irreparably damaged if the provisions of Paragraphs 6
hereof are not specifically enforced and (ii) the award of monetary damages will
not adequately protect the Executive in the event of a breach thereof by the
Company. By virtue thereof, the Executive agrees and consents that if he
violates any of the provisions of this Agreement, and the Company agrees and
consents that if it violates any of the provisions of Paragraphs 6 hereof, the
other party, in addition to any other rights and remedies available under this
Agreement or otherwise, shall (without any bond or other security being required
and without the necessity of proving monetary damages) be entitled to a
temporary and/or permanent injunction to be issued by a court of competent
jurisdiction restraining the breaching party from committing or continuing any
violation of this Agreement, or any other appropriate decree of specific
performance. Such remedies shall not be exclusive and shall be in addition to
any other remedy which any of them may have.
11. Miscellaneous.
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a) Entire Agreement; Amendment. This Agreement constitutes the whole
employment agreement between the parties and may not be modified, amended or
terminated except by a written instrument executed by the parties hereto. It is
specifically agreed and understood, however, that the provisions of that certain
letter agreement dated as of September 15, 2005 granting to the Executive
extended separation benefits in the event of a change in control of the Company
shall survive and shall not be affected hereby. All other agreements between the
parties pertaining to the employment or remuneration of the Executive not
specifically contemplated hereby or incorporated or merged herein are terminated
and shall be of no further force or effect.
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b) Assignment. Except as stated below, this Agreement is not
assignable by the Company without the written consent of the Executive, or by
the Executive without the written consent of the Company, and any purported
assignment by either party of such party's rights and/or obligations under this
Agreement shall be null and void; provided, however, that, notwithstanding the
foregoing, the Company may merge or consolidate with or into another
corporation, or sell all or substantially all of its assets to another
corporation or business entity or otherwise reorganize itself, provided the
surviving corporation or entity, if not the Company, shall assume this Agreement
and become obligated to perform all of the terms and conditions hereof, in which
event the Executive's obligations shall continue in favor of such other
corporation or entity.
c) Waivers, etc. No waiver of any breach or default hereunder shall be
considered valid unless in writing, and no such waiver shall be deemed a waiver
of any subsequent breach or default of the same or similar nature. The failure
of any party to insist upon strict adherence to any term of this Agreement on
any occasion shall not operate or be construed as a waiver of the right to
insist upon strict adherence to that term or any other term of this Agreement on
that or any other occasion.
d) Provisions Overly Broad. In the event that any term or provision of
this Agreement shall be deemed by a court of competent jurisdiction to be overly
broad in scope, duration or area of applicability, the court considering the
same shall have the power and hereby is authorized and directed to modify such
term or provision to limit such scope, duration or area, or all of them, so that
such term or provision is no longer overly broad and to enforce the same as so
limited. Subject to the foregoing sentence, in the event any provision of this
Agreement shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall attach only to such provision and shall not
affect or render invalid or unenforceable any other provision of this Agreement.
e) Notices. Any notice permitted or required hereunder shall be in
writing and shall be deemed to have been given on the date of delivery or, if
mailed by registered or certified mail, postage prepaid, on the date of mailing:
i. if to the Executive to:
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▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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ii. if to the Company to:
Arrow Electronics, Inc.
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▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President and General Counsel
Either party may, by notice to the other, change his or its address for notice
hereunder.
f) New York Law. This Agreement shall be construed and governed in all
respects by the internal laws of the State of New York, without giving effect to
principles of conflicts of law.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
Attest: ARROW ELECTRONICS, INC.
By:
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Assistant Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President &
General Counsel
THE EXECUTIVE
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