EXHIBIT 10.1
EMPLOYMENT AGREEMENT made as of the 29th day of August, 2006
by and between ARROW ELECTRONICS, INC., a New York corporation with
its
principal office at 50 Marcus Drive, Melville, New York 11747 (the
"Company"),
and VIN MELVIN, residing at 2741 Tammerack Lane, Hampton Cove,
Alabama 35763
(the "Executive").
WHEREAS, the Company desires to employ the Executive, and the
Executive desires to be employed by the Company, as Vice President,
IT of the
Company, with the responsibilities and duties of an executive
officer of the
Company; and
WHEREAS, the Company and the Executive wish to provide for the
employment of the Executive as an employee of the Company and for
him to render
services to the Company on the terms set forth in, and in
accordance with the
provisions of, this Employment Agreement (the "Agreement"), which
Employment
Agreement shall supersede and replace any agreement pertaining to
the
Executive's employment by the Company, written or oral, entered
into prior to
the date hereof;
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 for
the Employment Period defined in Paragraph 3, to perform such
duties for the
Company and its subsidiaries and affiliates and to hold such
offices 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 Vice President, IT of the Company, 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 Vice President, IT).
If the Board of Directors does not either continue the
Executive in the office of Vice President, IT 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 $350,000 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
$175,000 per year;
provided, however, that the Executive's actual incentive payment
for 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 200% of 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").
(d) Automobile. While the Executive is actively working for
the Company, the Company will pay the Executive a monthly
automobile allowance
of $850.
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(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 harmless the Executive 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 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.
(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 restricted stock grant
programs) or
employees in general, on a basis consistent with other senior
executives.
(i) Initial Bonus and Equity Awards. The Company will pay the
Executive $150,000 within the first 30 days of his employment with
the Company,
which amount shall be repaid in full by the Executive if he resigns
for any
reason (other than a permitted resignation described in
subparagraph 1(b) of
this Agreement) during the first 12 months of his employment with
the Company.
In addition, as soon as practical following the commencement of the
Executive's
employment, the Company's Compensation Committee will award the
Executive 10,000
shares of restricted stock of the Company and 15,000 non-qualified
stock
options, each pursuant to the terms of the Company's 2004 Omnibus
Incentive
Plan, which shares and options will both vest separately at the
rate of 25% on
each anniversary of the date of the award (until fully vested in
the year 2010)
while the Executive is employed by the Company.
3. The
Employment Period.
----------------------
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) August 31, 2008; 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 thirty 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 8 and the obligations of the Executive contained in
Paragraphs 9(b)
and 9(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 prior to the expiration of the Employment Period, the
Executive's
post-discharge compensation and benefits will be as follows,
subject to the
Executive's execution of a release as set forth in Paragraph 7
below:
(a) The Executive will be placed on inactive or "RA"
status beginning on the day following his last day of active work
and ending on
the earliest of (i) the date the Employment Period was scheduled to
expire, (ii)
the day the Executive begins employment for a person or entity
other than the
Company, or (iii) the day the Executive fails to observe any
provision of this
Agreement, including his obligations under Paragraphs 8 and 9 (the
"RA Period),
during which time he will be paid the salary provided in
subparagraph 2(a) on
the same schedule as if he still were an active employee (less the
cust
