EXHIBIT 10.1
EMPLOYMENT AGREEMENT
made as of the 1st day of January, 2007 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 KEVIN
GILROY, residing at
329 Old Bailey Lane, West Chester, Pennsylvania 19382 (the
"Executive").
WHEREAS, the Company
desires to employ the Executive, and the Executive
desires to be employed by the Company, as a Senior Vice President
of the Company
and
Co-President, Arrow Enterprise Computing Solutions, 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.
----------------------
(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 Senior Vice President of the Company and Co-President, Arrow
Enterprise Computing Solutions, 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 a Senior
Vice President
of the Company and
Co-President,
Arrow Enterprise Computing
Solutions).
If
the Board of Directors
does not either
continue the Executive in the
office of a Senior
Vice President of the Company and Co-President, Arrow
Enterprise Computing
Solutions 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
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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.
(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.
-------------
(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 $400,000 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 $240,000 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.
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(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.
(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
$100,000 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 20,000 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:
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(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)
December 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.
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.
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 subparagrap
