EXHIBIT 10.1
EMPLOYMENT AGREEMENT made as of the 1st day of September, 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 PHILIPPE COMBES, residing at 47 Route de Clementy, 1260 Nyon
Switzerland
(the "Executive").
WHEREAS, the Company desires to employ the Executive, and the
Executive desires to be employed by the Company, as a Vice
President 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 a Vice President 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).
If the Board of Directors does not either continue the
Executive in the office of Vice President 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 E340,875.00 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; and
(ii) such additional compensation by way of salary or
bonus or fringe benefits as are set forth herein or, to the extent
the same are
not paid to the Executive under the German employment agreement, in
the Offer
Term Sheet attached hereto as Annex A (the "Term Sheet") and
otherwise 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.
(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
E255,657.00 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. The Executive's incentive payment for the period
September 1, 2006
through August 31, 2007 shall be guaranteed at a minimum of
E255,657.00.
(c) Automobile. While the Executive is actively working for
the Company, the Company will pay the Executive an annual
automobile allowance
of at least E8,100. (The Company is currently reviewing the
competitiveness
of this amount.)
(d) 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.
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(e) 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.
(f) Initial Bonus and Equity Awards. The Company will pay the
Executive the E198,509.00 sign-on bonus referenced in the Term
Sheet 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 the
20,000 shares of
restricted stock of the Company and 30,000 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 12th and
6th 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. In consideration of the undertakings given by
the Executive
in Paragraphs 7 and 8, if the Company gives notice of non-renewal,
the Executive
will be entitled to receive the lump-sum payments described in
Paragraph 6(a)
and 6(b) below (and otherwise in accordance with the terms of
Paragraph 6) at
the end of the Employment Period. For the avoidance of doubt, if
the Executive
gives notice of non-renewal, the Executive shall not be entitled to
such
payments.
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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, fraud or
gross negligence by the Executive in connection with his employment
hereunder,
the Company shall have the right to immediately terminate the
Employment Period
by giving the Executive notice in writing of the reason for such
proposed
termination. Upon 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.
6.
Termination Without Cause.
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In the event that the Company wishes to discharge the
Executive without cause prior to the expiration of the Employment
Period, the
Company will give the Executive six months notice in writing (or an
additional
six months compensation as described in this Paragraph 6 in lieu
of
